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Title: Do cross-border mergers and acquisitions increase short-term market performance? The case of Chinese firms
Authors: Tao, Fang
Liu, Xiaohui
Gao, Lan
Xia, Enjun
Keywords: Chinese firms
Cross-border mergers and acquisitions
Stock market reactions
Political risk
Issue Date: 2017
Publisher: © Elsevier
Citation: TAO, F. ... et al., 2017. Do cross-border mergers and acquisitions increase short-term market performance? The case of Chinese firms. International Business Review, 26 (1), pp. 189-202.
Abstract: Despite the new momentum in cross-border mergers and acquisitions (M&As) by emerging market firms, we have a limited understanding of the impact of these activities. Drawing on signalling theory and the institution-based view, this paper examines the extent of stock market reactions to the announcement of cross-border M&A deals, based on an event study of a sample of Chinese firms during the period 2000– 2012. The findings indicate that the announcement of cross-border M&As results in a positive stock market reaction; this effect is more significant in the mainland Chinese stock markets (Shanghai and Shenzhen) than that in the Hong Kong market. The shareholders of Chinese firms that acquire a target firm in a host country with a low level of political risk gain higher cumulative abnormal returns than those firms targeting companies in countries with a high level of political risk. The shareholders of Chinese state-owned enterprises experience lower abnormal returns compared with those of Chinese privately owned firms when engaging in cross-border M&A deals.
Description: This paper was published in the journal International Business Review and the definitive published version is available at http://dx.doi.org/10.1016/j.ibusrev.2016.06.006.
Version: Accepted for publication
DOI: 10.1016/j.ibusrev.2016.06.006
URI: https://dspace.lboro.ac.uk/2134/22374
Publisher Link: http://dx.doi.org/10.1016/j.ibusrev.2016.06.006
ISSN: 1873-6149
Appears in Collections:Published Articles (Business)

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