The impact of state ownership, formal institutions and resource seeking on acquirers’ returns of Chinese M&A

Min Du, Agyenim Boateng*, David Newton

*Corresponding author for this work

    Research output: Contribution to journalArticle

    Abstract

    We examine the effects of state ownership, institutions and resource-seeking behavior on post-acquisition stock price returns of Chinese cross-border mergers and acquisitions over the period 1998–2008. Chinese acquiring firms experience negative returns ranging from 2.92 to 10.80 % in 12- and 60-month post-event periods, respectively. State ownership (SOE), interaction between R&D and SOE, formal institutional distance and acquirer size have a positive and significant impact on the long-term acquirer returns. However, the interaction between tangible resources and SOE and acquirer cash holdings appears to have a negative and significant impact on long-term returns. Overall, our results suggest that the state and institutions constitute important sources of long-term value creation for Chinese acquirers.
    Original languageEnglish
    Pages (from-to)159-178
    Number of pages20
    JournalReview of Quantitative Finance and Accounting
    Volume47
    Early online date4 Feb 2015
    DOIs
    Publication statusPublished - Jul 2016

    Keywords

    • long-term returns
    • state ownership
    • China
    • mergers & acquisitions
    • finance

    Fingerprint Dive into the research topics of 'The impact of state ownership, formal institutions and resource seeking on acquirers’ returns of Chinese M&A'. Together they form a unique fingerprint.

  • Cite this