The tangible hand? Does Communist Party involvement in governance promote corporate M&A performance

Abstract

This paper investigates the impact of the Communist Party of China's (CPC) participation in corporate governance on the M&A performance of Chinese State-Owned Enterprises (SOEs). Using unbalanced panel data from 2008 to 2020, the findings demonstrate that while the CPC's involvement has no significant effect on short-term M&A performance, it positively impacts long-term performance. This effect is especially pronounced in local SOEs and cross-district M&A deals. The research underscores the need for a nuanced approach to political participation in corporate governance and contributes to the understanding of the dynamics in SOEs’ M&A performance.