How Do Chinese Firms Perform Before and After Cross-Border Mergers and Acquisitions?

Liu, Haiyue; Li, YiXian; Yang, Rui; Xiao-ping, LI

doi:10.1080/1540496x.2018.1556636

Cited by 31 publications

(16 citation statements)

References 43 publications

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“…Through an empirical analysis of 1695 Chinese companies' CBM&A transactions from 2006 to 2017, Ouyang and Li [31] conclude that the Confucius Institute can effectively improve the success rate of CBM&A. In their view, Confucius Institutes established in target countries have played a positive role in accelerating the globalization of Chinese firms, especially those that lack experience in CBM&A. Liu et al [48] find that the cultural exporting performed by the Confucius Institute has facilitated China's overseas M&A. Generally speaking, the more complete the Confucius Institute system in a target country, the more frequently Chinese companies will conduct overseas M&As there.…”

Section: Confucius Institutes and Cbmanda Performancementioning

confidence: 99%

“…The Belt and Road Initiative (OBOR): Dummy variable that evaluates whether the cross-border M&A in the belt and road countries outperformed those outside the belt and road (1 was assigned if the M&A took place in BRI countries and 0 otherwise) [48].…”

Section: Dependent Variablementioning

confidence: 99%

“…Openness (LOPEN): The more open a country is in international trade, the more attractive it is likely to be as a destination for M&A; therefore, the openness is the ratio of the sum of imports and exports to nominal GDP (current US$ in a given year) [48].…”

Section: Control Variablesmentioning

confidence: 99%

“…Technology level (LTECH): To measure the level of technology in the target country, the ratio of the target country's high-technology exports to nominal GDP (current US$ in a given year) was used [48].…”

Section: Control Variablesmentioning

confidence: 99%

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The Role of Confucius Institutes and One Belt, One Road Initiatives on the Values of Cross-Border M&A: Empirical Evidence from China

2020

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This study examines how national cultural policies such as Confucius Institutes and One Belt, One Road initiatives (BRI) affect the post-acquisition returns of Chinese cross-border mergers and acquisitions based on data from a sample of 192 transactions covering 2011 to 2015. We find that the cultural export of Chinese Confucius Institutes and the BRI exert a significantly positive impact on long-term acquirer returns, while cultural/institutional distance exerts a negative impact. Further evidence shows that Confucius Institutes and BRI mitigate the negative effect of cultural distance between merging firms. These results offer the first evidence that national cultural translation has substantial impacts on the long-run acquirer financial performance of cross-border mergers that decrease cultural institutional heterogeneity between countries.

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Section: Confucius Institutes and Cbmanda Performancementioning

confidence: 99%

Section: Dependent Variablementioning

confidence: 99%

Section: Control Variablesmentioning

confidence: 99%

Section: Control Variablesmentioning

confidence: 99%

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The Role of Confucius Institutes and One Belt, One Road Initiatives on the Values of Cross-Border M&A: Empirical Evidence from China

2020

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“…Unlike a majority of Western-based studies that highlight the positive effects of debt financing on ensuing firm performance, it provides new evidence that in a rapidly developing economy with unique legal requirements and institutional environments, China, equity-financed M&A transactions lead to significantly better performance than debt-financed transactions. Second, in terms of research perspectives, different from the recent studies on China that highlight the beneficial role the Chinese government has had in value creation through facilitating M&A deals [2,23,24], the impact of ownership on M&A payment methods, and the impact of payment methods on stock price returns [22], we examine the joint effects of both financing methods and ownership on M&A financial performance. This is important because both financing choices and ownership will affect the competitiveness, resourcing, costs and effective functioning of acquirers.…”

Section: Introductionmentioning

confidence: 99%

Does M&A Financing Affect Firm Performance under Different Ownership Types?

et al. 2020

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Mergers and acquisitions (M&A) are an essential way for enterprises to achieve sustainable development. As large sums of money are typically involved in M&A transactions, financing is a vital factor in outcomes. This study examines the relation between equity and debt financing of M&A on subsequent performance, and the effect of ownership (state-owned enterprises versus private-owned enterprises) on M&A performance in China. We are motivated to examine the relation between financing methods and M&A performance in China because the differences in ownership, resource availability and policy support by the government for many firms may affect subsequent performance. Using a large sample of Chinese A-share listed companies between 2009 and 2016, we find that equity-financed M&A transactions lead to significantly better performance than debt-financed transactions. Equity-financed M&A transactions of state-owned enterprises (SOEs) perform significantly better as compared to debt-financed M&A, whereas equity-financed M&A transactions of private-owned enterprises (POEs) have little effect on their performance. This study extends our insights into the relation between M&A financing types and firm performance under different ownership types in the context of emerging markets.

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Do women in the boardroom influence foreign acquisitions' premium and outcomes? Evidence from China

Chu,

Elsayed,

Ahmed

2024

Int. J Fin Econ

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This paper examines whether gender diversity influences foreign merger and acquisition (M&A) premiums and outcomes in China. Consistent with agency and resource dependence theories, we find that female directors significantly reduce the acquisition premium paid for foreign targets. We show that the market responds positively in the short‐term (measured by cumulative abnormal returns) to the announcement of foreign acquisitions by firms with greater female representation in the boardroom. We further find significant evidence that acquirers' boards comprising more female directors experience value creation and better operating synergies (measured by buy‐and‐hold abnormal returns and changes in return on assets) in the long‐term following engagement in foreign M&A deals. Interestingly, after distinguishing between female independent and executive directors, we find that our previous finding on board gender diversity can be attributable to both the monitoring (independent directors) and supervisory (executive directors) roles played by female directors. We also find evidence accords with the argument of the critical mass of female directors' representation in the boardroom. Our results are robust after controlling for endogeneity issues using instrumental variables (IV), propensity score matching (PSM), Heckman, and firm fixed‐effects methods. Overall, our findings offer additional empirical support for the global concern by regulators for improving corporate governance practices by increasing female quotas in the boardroom.

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How Do Chinese Firms Perform Before and After Cross-Border Mergers and Acquisitions?

Cited by 31 publications

References 43 publications

The Role of Confucius Institutes and One Belt, One Road Initiatives on the Values of Cross-Border M&A: Empirical Evidence from China

The Role of Confucius Institutes and One Belt, One Road Initiatives on the Values of Cross-Border M&A: Empirical Evidence from China

Does M&A Financing Affect Firm Performance under Different Ownership Types?

Do women in the boardroom influence foreign acquisitions' premium and outcomes? Evidence from China

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