Determinants of Chinese cross-border M&As

Hu, N. , Zhang, Y. and Tan, S. (2016) Determinants of Chinese cross-border M&As. Annals of Economic and Finance, 17(1), pp. 209-233.

Abstract

This paper focuses on two of the key determinants of Chinese cross-border M&A performance, industry preference and currency appreciation. Our results show that although resource-related bidders may be motivated to pursue national strategic goals, they do not sacrifice their shareholders’ wealth. The substantial RMB appreciation following the exchange rate reform leads to higher bidder abnormal returns in the short-term, with no long-term reversal. We find that the insignificant long-term abnormal returns are mainly due to the enhanced empire building invectives and other agency costs of cash-rich firms in some of the currency-driven acquisitions.

• Item Type: Articles
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Hu, Dr Nan
• Authors: Hu, N., Zhang, Y., and Tan, S.
• College/School: College of Social Sciences > Adam Smith Business School > Accounting and Finance
• Journal Name: Annals of Economic and Finance
• Publisher: Peking University Press
• ISSN: 1529-7373
• Copyright Holders: Copyright © 2017 The Authors
• Publisher Policy: Reproduced in accordance with the copyright policy of the publisher.