Peer Effect in Merger and Acquisition Activities and Its Impact on Corporate Sustainable Development: Evidence from China

Gu, Yue; Ben, Shenglin; Lv, Jiamin

doi:10.3390/su14073891

Cited by 12 publications

(11 citation statements)

References 34 publications

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“…Simultaneously, economic policy uncertainty enhances the peer effects of enterprise investment because managers tend to be consistent with their peers to reduce the impact of asymmetric information and external risks (Hu, 2022). Peer effects in merger and acquisition decision-making (Gu et al, 2022) are important factors affecting the goodwill of GEM companies' merger and acquisition (Fu et al, 2015). In terms of corporate financing decisions, peer effects exist in the corporate capital structure (Leary and Roberts, 2014;Kaustia and Rantala, 2015;Lian et al, 2020).…”

Section: Literature Review and Research Hypothesis 21 Literature Reviewmentioning

confidence: 99%

“…S et al, 2018;Flammer, 2021;Amighini et al, 2022), the green financial behavior of different subjects (Lioui and Sharma, 2012;Kim et al, 2014) and the impact of green finance on enterprises, the economy, and the environment Liu et al, 2019;Ren et al, 2020;Zhou et al, 2020;Flammer, 2021). On the other hand, existing studies show that peer effects affect enterprises' investment and financing decisions (Foucault and Fresard, 2014;Leary and Roberts, 2014;Kaustia and Rantala, 2015;Bustamante and Fresard, 2021), merger and acquisition decision-making (Gu et al, 2022) and corporate governance (Adhikari and Agrawal, 2018;Yang et al, 2020), etc. Peer effects can help enterprises make important decisions when it is difficult for them to obtain useful information efficiently and at a low cost (Kaustia and Rantala, 2015).…”

Section: Introductionmentioning

confidence: 99%

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Peer effects of enterprise green financing behavior: Evidence from China

Yang

Zhang²,

Zhang³

et al. 2022

Front. Environ. Sci.

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Green finance is critical for adjusting the industrial structure and promoting sustainable economic development; therefore, it is important to understand enterprise green investment and financing behavior. This study aims to investigate the peer effects of enterprise green financing behavior. Based on theoretical analysis, this study selected data from Chinese A-share listed companies from 2011 to 2020 as the research sample. In this study, the fixed effects model was used to examine the peer effects of enterprise green financing. Meanwhile, a moderating effect model was employed to explore the function of the economic policy uncertainty and corporate social responsibility commitment on peer effects of enterprise green financing. The results show that the enterprise’s green financing behavior increases significantly with its peer companies’ (i.e., other companies in the same industry or the same region) green financing behavior, and responds to peer companies’ characteristics in the same industry, indicating peer effects on green financing behavior. The peer effects of enterprise green financing are stronger when the economic policy uncertainty is higher, suggesting that the green financing behavior of peer companies reduces external uncertainty by providing comprehensive and useful information, thus enhancing the enterprise’s information environment and enabling it to make better green financing decisions. Moreover, peer effects are more pronounced when corporate social responsibility commitment is higher, indicating that peer companies’ higher performance in social responsibility can improve their information transparency and build good reputation, increasing the enterprise’s disclosure and reputation costs in the capital market. Therefore, our findings highlight the importance of peer effects in enterprise green financing behavior. To enhance the enterprises’ green financing behavior and promote green finance development, the government should focus on the industrial and regional situation to conduct green finance and promote the overall green financing behavior of enterprises by establishing typical enterprises or pilot cities.

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Section: Literature Review and Research Hypothesis 21 Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Peer effects of enterprise green financing behavior: Evidence from China

Yang

Zhang²,

Zhang³

et al. 2022

Front. Environ. Sci.

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“…Peer effects, in which individuals learn and imitate their peers' behaviors, have been widely recognized as a phenomenon that arises when other individuals make decisions. Economic theoretical analyses indicate that peer effects are present in different contexts, such as individual consumption (Yang et al, 2022), investment decision, corporate disclosure (Seo, 2021), merger and acquisition (Gu et al, 2022), and so on. A group's average behavior affects individual group members' decisions (Manski, 1993).…”

Section: Introductionmentioning

confidence: 99%

“…At present, most studies related to peer effects concentrate on the imitation of peer firms in activities such as disclosure decisions (Seo, 2021), asset allocation (Zhang et al, 2018), merger and acquisition (Gu et al, 2022), regular investments and innovation (Machokoto et al, 2021;Yan & Zhu, 2020), corporate governance (Sumani & Roziq, 2020), liquidity policy (Samo & Murad, 2019), and organizational management (Adel et al, 2019;AlHares, 2020;AlHares et al, 2020). Studies on the existence of peer effects in capital structure have been conducted.…”

Section: Introductionmentioning

confidence: 99%

Peer effects and the mechanisms in corporate capital structure: Evidence from Chinese listed firms

Liu

Xie

et al. 2023

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Research background: Peer effects, in which individuals learn and imitate their peers? behaviors, have been widely recognized in different contexts. Particularly, with increasingly fierce competition, firms can no longer make financial decisions in isolation when facing terrible external operational environments. In contrast, observing peers? actions in corporate policies can help reveal intentions regarding what peers are doing, which is vital for policymakers and financial managers. Studies on the existence of capital structure peer effects in the Chinese context have been conducted, but the mechanisms of peer effects are still ambiguous at present. Purpose of the article: This study aims to examine peer effects in capital structure and discover the mechanisms in the Chinese context. Understanding the mechanisms behind peer effects can help scholars and policymakers obtain more insights into the working mechanisms of peer effects. Furthermore, how the industry- and firm-specific characteristics affect peer effects and the selection of mechanisms should be analyzed. Methods: Using the fixed effects model (industry effect and year effect) and propensity score matching (PSM), as well as market leverage and heterogeneous stock shocks, we investigate peer effects, the mechanisms, and the effects of specific factors from industries and firms based on the sample of Chinese non-financial A-share listed firms on the Shanghai and Shenzhen stock markets from 2014 to 2021. Findings & value added: Study results show that peer effects exist in the corporate capital structure in the Chinese capital markets. Unlike previous studies, this analysis captures three mechanisms: the industrial average, industrial leaders, and industrial-similar firms. The intensity of peer effects and selection of mechanisms are influenced by both industry-specific characteristics (the degree of industrial competition and financing constraints) and firm-specific characteristics (firm size and market share).

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“…Te long cycle and high uncertainty of investment mean that enterprises need sufcient market information support when making decisions. By imitating the investment activities of peers, managers can achieve the purpose of reducing the cost of information search and at the same time ensure that the company will not fall behind the peers to maintain its market position [9,10]. Te separation of management rights and ownership of modern enterprises determines that managers are the actual decision makers and executors of enterprise decisions.…”

Section: Introductionmentioning

confidence: 99%

Economic Policy Uncertainty, Managerial Ability, and the Peer Effect of Corporate Investment

Yang

2022

Mathematical Problems in Engineering

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How the macro-external environment, i.e., the uncertainty of economic policies, affects the peer effect of corporate investment and whether the ability of managers, as the main decision of corporate investment, affects the peer effect of enterprise investment is worthy of further study. This paper uses Baker’s economic policy uncertainty index to obtain China’s economic policy uncertainty index and uses the DEA-Tobit two-stage model to measure the ability of managers, combined with the relevant data of China’s A-share listed companies from 2010 to 2020, to study the impact of economic policy uncertainty and managers’ ability on corporate investment peer effect. We found that China’s economic policy uncertainty increases the information acquisition cost of micro-firms and deepens the degree of information asymmetry, and firms are strongly motivated to learn or even imitate the investment decisions of enterprises in the same industry, thus intensifying the peer effect of investment. For enterprises of different nature, the economic policy uncertainty has a more significant impact on the investment peer effect of non-state-owned enterprises than state-owned enterprises. Compared with large enterprises, the impact of economic policy uncertainty on the investment cohort effect of small enterprises is more significant. Then, through group regression according to the median of managerial ability, we found that the investment peer effect is more obvious in enterprises with low management ability and the effect of economic policy uncertainty on investment peer effect is more significant in the sample with low management ability. Based on the empirical research conclusions, this paper puts forward the following suggestions: improve the corporate governance mechanism and the management ability of managers. In issuing economic policies, the government should be cautious and stable to reduce the uncertainty of economic policies.

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Peer Effect in Merger and Acquisition Activities and Its Impact on Corporate Sustainable Development: Evidence from China

Cited by 12 publications

References 34 publications

Peer effects of enterprise green financing behavior: Evidence from China

Peer effects of enterprise green financing behavior: Evidence from China

Peer effects and the mechanisms in corporate capital structure: Evidence from Chinese listed firms

Economic Policy Uncertainty, Managerial Ability, and the Peer Effect of Corporate Investment

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