Research studies have shown how firm performance affects its governance structure, but few have studied the impact of corporate ownership structure and management reward on both firm performance and M&A strategy. With the surge of M&As of Chinese enterprises in the last decade, it would be fruitful to find out their relationships. In this study, we have developed a structural framework with eight hypotheses to describe the relationships. Along with ownership structure and management reward, which are part of the corporate governance, we also include intangible assets as a key resource variable affecting performance and M&A. A LISREL model and the RESSET data base with Chinese public firms’ financial data have been used to test our hypotheses. All the hypotheses are confirmed. The literature contributions and the business implications have been discussed. Finally, future research work has been indicated.
Available for download here.