State ownership, institutional effects and value creation in cross-border mergers & acquisitions by Chinese firms

Min Du, Agyenim Boateng*

*Corresponding author for this work

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    Abstract

    This paper considers the effects of state ownership and institutional influences on value creation through cross-border mergers & acquisitions by Chinese firms during the period using a sample of 468 firms. The findings indicate that Chinese bidders experience wealth gains ranging from 0.4771% to 1.5210% over a 10-day event window. The cross-sectional analysis indicates that state ownership, formal institutional distance, reforms in the foreign currency approval system exert significant impact on shareholder value. By considering the state ownership and institutions, this study provides evidence that government and institutions play a huge role in value creation of emerging market firm internationalisation through cross-border mergers & acquisitions (CBM&A).
    Original languageEnglish
    Pages (from-to)430-442
    Number of pages13
    JournalInternational Business Review
    Volume24
    Issue number3
    Early online date30 Oct 2014
    DOIs
    Publication statusPublished - Jun 2015

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    Keywords

    • Chinese firms
    • mergers and acquisitions
    • state ownership
    • value creation

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