Abstract
This study examines the impact of the establishment of mergers and acquisitions (M&A) funds by Chinese listed firms and their subsequent investments on the stock market value of these firms. The results indicate that M&A funds, in general, do not create value for listed firms. The investments made by these funds also have a dampening effect on the market value of listed firms, particularly when investor sentiment is high, which leads to lower short-term stock returns. However, this negative effect diminishes during stronger overall market conditions. These findings suggest that listed firms need to address market perception challenges associated with M&A funds.
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