Chinese enterprise’s wealth effect of cross-border M&amp;A

Xingrui Yang

doi:10.1051/shsconf/20162502007

Abstract

This paper explores the Chinese enterprises’ wealth effect of cross-border M&A and the factors which impact it. The results indicate that in the [-10, 10] event window Chinese enterprises’ get wealth effect from cross-border M&A, but in the longer event windows this wealth effect doesn’t exist. And high R&D density of the acquirer enterprises, acquisitions experience and host country’s high level of innovation have positive influence to this cumulative abnormal return, while large asset scale, high growth speed, high equity centralized degrees and horizontal acquisition mode have significant negative effects.

Highlights

Due to the in-depth development of globalization and gradual increase of the corporate power, Chinese enterprises are actively engaged in cross-border M&A boom, the cross-border M&A have become the main form of foreign direct investment of Chinese enterprises
Even in the wake of the global economic slowdown, exacerbated by the crisis in international trade competition era, the pace of cross-border mergers and acquisitions of Chinese enterprises is still gradually rising, and China ranks among the world's top three big deals country in 2011 (Economist, 2011)
With the Chinese enterprises’ growth of the number of cross-border M&A transactions, the wealth effect of cross-border M&A has become an issue of concern, but the research on wealth effect of transnational M&A are more concentrated on developed countries

Summary

INTRODUCTION

Due to the in-depth development of globalization and gradual increase of the corporate power, Chinese enterprises are actively engaged in cross-border M&A boom, the cross-border M&A have become the main form of foreign direct investment of Chinese enterprises. Even in the wake of the global economic slowdown, exacerbated by the crisis in international trade competition era, the pace of cross-border mergers and acquisitions of Chinese enterprises is still gradually rising, and China ranks among the world's top three big deals country in 2011 (Economist, 2011). With the Chinese enterprises’ growth of the number of cross-border M&A transactions, the wealth effect of cross-border M&A has become an issue of concern, but the research on wealth effect of transnational M&A are more concentrated on developed countries. Few studies for Chinese enterprises, and there are some problems, e.g. fewer number of samples, the

REVIEW OF LITERATURE

RESEARCH DATA AND METHODS

TEST AND ANALYSIS OF WEALTH EFFECT’S INFLUENCING FACTORS