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LIU, CHONG (2) answer(s).
 
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ID:   175012


Does cheap electricity in a target's location add value to the acquirer? Evidence from China / Li, Minghui; Liu, Chong; Shen, Chaohai   Journal Article
Liu, Chong Journal Article
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Summary/Abstract Domestic cross-region mergers and acquisitions (M&A) are a popular corporate investment behavior. Merger and acquisition activity can have a great impact on the value of both firms involved in the transaction; market investors will buy and sell shares of the target and acquiring firms involved in M&A activity as a way to express whether they are optimistic about the success of the transaction. By analyzing the electricity price differences between targets' and acquirers' locations in nonlocal M&A activity in China from 2010 to 2017, and applying Fama-French three-factor and five-factor models, we find that many M&A transactions use the comparative advantages of lower electricity prices in the target's location, and market investors highly value M&A transactions driven by electricity price differences. The value placed by investors on these transactions is higher still when both the acquirer and the target are high electricity-intensive firms. Our work is among the first to rigorously analyze domestic cross-region M&A activity from the perspective of differential electricity prices between the targets' and acquirers' locations. We provide policy implications on how a less developed area with rich and cheap energy resources could use comparative advantages to promote economic development and boom the power market by M&A.
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2
ID:   137534


Impacts of ISO 14001 adoption on firm performance: evidence from China / He, Wenlong; Liu, Chong ; Lu, Jiangyong ; Cao, Jing   Article
Lu, Jiangyong Article
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Summary/Abstract This paper investigates the impacts of ISO 14001 adoption on the performance of firms using a sample of Chinese firms. The results show that adopting ISO 14001 has insignificant impacts on the financial performance of Chinese firms. A further investigation shows that the adoption of ISO 14001 increases sales and costs of firms in similar magnitudes, thus causes insignificant net effects on the financial performance. Despite negligible financial gains, the adoption of ISO 14001 provides implicit non-financial benefits, such as promoting export and relieving coercive environmental inspections from the government.
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