The impact of State Ownership, Formal Institutions and Resource Seeking on Acquirers' Return of Chinese M&A

Min Du, Agyenim Boateng, David Newton

Research output: Contribution to journalArticle

12 Citations (Scopus)

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
JournalReview of Quantitative Finance and Accounting
Volume47
Issue number1
Early online date4 Feb 2015
DOIs
Publication statusPublished - Jul 2016

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Resources
Formal institutions
State ownership
Long-term returns
Interaction
Cash holdings
Value creation
Chinese firms
Stock prices
Cross-border mergers and acquisitions

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The impact of State Ownership, Formal Institutions and Resource Seeking on Acquirers' Return of Chinese M&A. / Du, Min; Boateng, Agyenim; Newton, David.

In: Review of Quantitative Finance and Accounting, Vol. 47, No. 1, 07.2016, p. 159-178.

Research output: Contribution to journalArticle

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