Political connection and M&A performance: evidence from China  

Sanjukta Brahma*, Jing Zhang, Agyenim Boateng, Chioma Nwafor

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

10 Citations (Scopus)
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This paper explores the role of political connections in mergers and acquisitions (M&A) by examining the stock market performance in the short-run announcement period and the long-run post-merger period of Chinese M&A from 1998 to 2017. We further examine whether the corporate governance mechanisms and nature of ownership may determine the extent by which political connections may impact on M&A outcome. The results show that political connection has a positive and significant impact on firm performance for both privately-owned enterprises (POEs) and state-owned enterprises (SOEs). The results are more pronounced in the presence of strong corporate governance mechanisms: board independence and board gender diversity. We also find that the effect of political connection on post-merger performance is higher for POEs in comparison to SOEs. Our results are robust across alternative measures of firm performance and alternative measures of political connection.
Original languageEnglish
Pages (from-to)372-389
Number of pages18
JournalInternational Review of Economics and Finance
Early online date8 Feb 2023
Publication statusPublished - May 2023


  • mergers
  • network theory
  • grabbing hand theory
  • political connections

ASJC Scopus subject areas

  • Economics and Econometrics
  • Finance


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