| ID | 143776 |
| Title Proper | Cross-Border mergers and acquisitions by Chinese firms |
| Other Title Information | value creation or value destruction? |
| Language | ENG |
| Author | Wu, Xianming ; Yang, Xingrui ; Yang, Haibin ; Lei, Hao |
| Summary / Abstract (Note) | Mixed results from studies on Chinese cross-border mergers and acquisitions (M&As) have been a puzzle for both academia and business professionals over the years. Do these M&As create value when Chinese firms acquire foreign target firms suffering heavy losses and even on the verge of bankruptcy? This article explores the wealth effect of M&As conducted by Chinese firms as well as the relevant factors from the asset-seeking perspective. The authors use 180 M&A cases conducted by listed firms in China between 2002 and 2012 as samples and examine their wealth effects in a method of event study. The results show that these M&A activities have produced significant positive wealth effects during the event window of [–10, 10]. The authors then study the key factors affecting wealth effects. The findings reveal that an acquiring firm’s strength via research and development (R&D) and M&A experience generates significant positive impacts on the wealth effect. The findings also reveal that an innovation orientation and development stage of host countries helps create positive wealth effects; vertical M&As are particularly favored by the market since they can gain easier access to R&D, marketing channels or mineral resources. |
| `In' analytical Note | Journal of Contemporary China Vol. 25, No.97; Jan 2016: p.130-145 |
| Journal Source | Journal of Contemporary China Vol: 25 No 97 |
| Key Words | R&D ; Chinese Firms ; Acquisitions ; Cross-Border Mergers ; Value Creation ; Value Destruction |