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

Min  Du; Agyenim Boateng

doi:10.1016/j.ibusrev.2014.10.002

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

Min Du, Agyenim Boateng^*

^*Corresponding author for this work

Research output: Contribution to journal › Article

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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 language	English
Pages (from-to)	430-442
Number of pages	13
Journal	International Business Review
Volume	24
Issue number	3
Early online date	30 Oct 2014
DOIs	https://doi.org/10.1016/j.ibusrev.2014.10.002
Publication status	Published - Jun 2015

Keywords

Chinese firms
mergers and acquisitions
state ownership
value creation

Documents and Links

10.1016/j.ibusrev.2014.10.002

Du, M. & Boateng, A. (2014) State ownership, institutional effects and value creation in cross-border mergers & acquisitions by Chinese firms
This is the pre-print version of an article published in International Business Review by Elsevier. Available at http://www.sciencedirect.com/science/article/pii/S0969593114001528 Copyright: © 2014 Elsevier Ltd. All rights reserved.
Submitted manuscript, 728 KB

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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).",

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