Could the Opening of HSR Reduce the M&amp;A Premium?

Yang, Xuan; Zhang, Qiusheng; Shen, Xiaotian; Qin, Jie; Sun, Qian; Xu, Yuanze

doi:10.3390/su14105756

Cited by 2 publications

(3 citation statements)

References 49 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The M&A premium rate refers to the percentage of the M&A transaction price exceeding the underlying asset value. Following Yang et al (2022) and , equation ( 1) is used to measure the green M&A premium: (Al-Shammari et al, 2019). Thus, companies must assign limited budget to ICSR, or ECSR, or both and CSR strategies can be either consistent or inconsistent between the two types.…”

Section: Methodsmentioning

confidence: 99%

See 1 more Smart Citation

Symbolic or substantive CSR: effect of green mergers and acquisitions premium on firm value in China

Liu,

Zhou,

et al. 2023

CMS

View full text Add to dashboard Cite

Purpose As the cost of completing a transaction, the green merger and acquisition (M&A) premium paid on mergers can influence whether the acquisition creates value or not. However, studies linking M&A premiums to firm value have had mixed results, even fewer studies have examined the effect of green M&A premiums on bidders’ firm value. The purpose of this paper is to investigate whether and how green M&A premiums affect firm value in the context of China’s heavy polluters. Design/methodology/approach Using 323 deals between 2008 and 2019 among China’s heavy polluters, this paper estimates with correlation analysis and multiple regression analysis. Findings Green M&A premiums are negatively associated with firm value. The results are more significant when firms adopt symbolic rather than substantive corporate social responsibility (CSR) strategies. Robustness and endogeneity tests corroborate the findings. The negative relation is stronger when acquiring firms have low governmental subsidy and environmental regulation, when firms have overconfident management, when firms are state-owned and when green M&A occurs locally or among provinces in the same region. This study also analyzes agency cost as an intermediary in the relationship between green M&A premium and firm value, which lends support to the agency-view hypothesis. Originality/value This study provides systemic evidence that green M&A premiums damage firm value through agency cost channel and the choice of CSR strategies from the perspective of acquirers. These findings enrich the literature on both the economic consequences of green M&A premiums and the determinants of firm value and provide a plausible explanation for mixed findings on the relationship between green M&A premiums and firm value.

show abstract

Section: Methodsmentioning

confidence: 99%

“…The M&A premium rate refers to the percentage of the M&A transaction price exceeding the underlying asset value. Following Yang et al (2022) and Li and Li (2022), equation (1) is used to measure the green M&A premium: …”

Section: Methodsmentioning

confidence: 99%

Symbolic or substantive CSR: effect of green mergers and acquisitions premium on firm value in China

Liu,

Zhou,

et al. 2023

CMS

View full text Add to dashboard Cite

show abstract

“…The reduction in information asymmetry helps auditors know more information, thereby reducing audit risks [17] and audit fees [18]. For clients, the HSR opening can promote the flow of information, alleviate information asymmetry, help investors fully understand enterprise information, reduce investors' supervision costs [46,47], strengthen the supervision of management, and reduce enterprises' agency costs. The lower the enterprise agency costs, the lower the audit fees [48].…”

Section: Information Asymmetry Perspectivementioning

confidence: 99%

The High-Speed Railway Opening and Audit Fees: Evidence from China

Zhang

Jun

2022

Sustainability

View full text Add to dashboard Cite

By constructing a staggered difference-in-differences model, we examined the effect of the high-speed railway opening on audit fees and its mechanism. The high-speed railway opening significantly reduces audit fees, and the inhibitory effect is more pronounced in firms located in non-central cities and small- and medium-sized audit firms. Furthermore, the high-speed railway opening mainly affects the audit fees by intensifying the competition in the audit market, but information asymmetry has no significant impact, indicating that the high-speed railway opening mainly reduces the audit fees by reducing the audit costs. In addition, the high-speed railway opening can improve the audit quality, which further shows that the high-speed railway opening can promote reasonable competition in the audit market.

show abstract

Could the Opening of HSR Reduce the M&A Premium?

Cited by 2 publications

References 49 publications

Symbolic or substantive CSR: effect of green mergers and acquisitions premium on firm value in China

Symbolic or substantive CSR: effect of green mergers and acquisitions premium on firm value in China

The High-Speed Railway Opening and Audit Fees: Evidence from China

Contact Info

Product

Resources

About