The impact of firm ownership, board monitoring on operating performance of Chinese mergers and acquisitions

Agyenim Boateng*, XiaoGang Bi, Sanjukta Brahma

*Corresponding author for this work

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    Abstract

    In this paper, we employ board monitoring mechanisms and within-firm governance variables to investigate the operating performance of 340 mergers and acquisitions in China over the 2004–2011 period. Our results document a significant deterioration in post-acquisition operating performance of acquiring firms over 12–36 months. We find independent directors, managerial shareholding, ownership concentration have a positive and significant impact on operating performance of acquiring firms. However, the related party transactions exert a negative and significant effect on matched control adjusted ROA. Further analysis of our sub-sample indicates that privately owned enterprises are better monitors compared to the state owned enterprises.
    Original languageEnglish
    Pages (from-to)925-948
    Number of pages24
    JournalReview of Quantitative Finance and Accounting
    Volume49
    Early online date8 Nov 2017
    DOIs
    Publication statusPublished - Nov 2017

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    Keywords

    • firm ownership
    • board monitoring
    • mergers & acquisitions

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