Research Output
The impact of state ownership, formal institutions and resource seeking on acquirers’ returns of Chinese M&A
  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.

  • Type:

    Article

  • Date:

    04 February 2015

  • Publication Status:

    Published

  • Publisher

    Springer Science and Business Media LLC

  • DOI:

    10.1007/s11156-015-0498-0

  • Cross Ref:

    10.1007/s11156-015-0498-0

  • ISSN:

    0924-865X

  • Funders:

    Leeds Beckett University

Citation

Du, M., Boateng, A., & Newton, D. (2016). The impact of state ownership, formal institutions and resource seeking on acquirers’ returns of Chinese M&A. Review of Quantitative Finance and Accounting, 47(1), 159-178. https://doi.org/10.1007/s11156-015-0498-0

Authors

Keywords

Long-term returns, State ownership, Institutions, Mergers & acquisitions

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