A Study on the Influence of IPO Over-funding on Goodwill of Enterprise M&A
HOU Deshuai1, WANG Yao2, DONG Manru3
1. School of Accounting, Capital University of Economics and Business, Beijing 100070, China; 2. School of Economics and Management, China University of Petroleum, Beijing 102249, China; 3. School of Information, Beijing Wuzi University, Beijing 101149,China
Abstract The risk of goodwill aggravates the instability of China’s capital market. Although it has attracted much attention, it mainly focuses on its economic consequences rather than the exploration of its causes. Therefore, based on the background of IPO over-raising and resource mismatch in China’s capital market, this paper tries to explore the causes of goodwill risk from the early stage of listed trading. The results show that IPO over-funding aggravates the formation of corporate goodwill bubble, and after endogenous test and robustness test, the research conclusion remains unchanged. The impact of IPO over-funding on corporate goodwill bubble mainly occurs in the first year after IPO over-funding, but not in the year of IPO over-funding and the second and third years after IPO over-funding. And in the areas where the management is overconfident, financing constraint is small and the degree of marketization is low, the impact of IPO over-funding on M & A goodwill will be more significant. Further study finds that companies are more likely to have goodwill impairment in the third year after IPO over-funding. The conclusion of this paper shows that IPO over-funding reduces the efficiency of resource allocation and intensifies the risk of goodwill impairment under premium M&A, and there is an obvious problem of overdoing. This paper provides a new perspective for exploring the causes of goodwill risk in China’s capital market and is of great significance for optimizing supervision and risk control of goodwill.
2022, Vol. 39 
