Abstract
ABSTRACT This study utilizes data from Chinese listed companies to investigate the relationship between performance commitments in mergers and acquisitions (M&A) and long-term excess returns. Our results indicate that entering into performance commitment contracts during the M&A process can significantly boost long-term excess return rates one year after M&A. However, the effect becomes negative after three years of M&A. Mechanism analysis shows that performance commitments enhance managerial short-sightedness and negatively impact perceived long-term company performance.
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