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.
Despite the new momentum in cross-border mergers and acquisitions (M&As) by emerging market
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–
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
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
firms when engaging in cross-border M&A deals.
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.