Research on Financial Risk Factors under the Perspective of Cross-border Mergers and Acquisitions of Chinese Enterprises

Abstract

Chinese enterprises are increasingly participating in cross-border mergers and acquisitions (M&A). However, due to the complexity of the M&A process, poor decision-making often leads to financial risks after the completion of the M&A. Therefore, this study aims to explore the influencing factors of financial risks in cross-border M&A. The research selected 67 listed companies that engaged in cross-border M&A transactions from 2018 to 2021 as the research sample. The Z-score model was utilized to measure financial risks, and a financial risk influencing factor index system was constructed based on literature research and factor analysis to assess the financial risk status and influencing factors before and after cross-border M&A transactions. The findings of this study reveal that cross-border M&A significantly increases financial risks for enterprises, and the payment and financing stages are key factors influencing the financial risks of cross-border M&A transactions.