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The Geographical Rotation of Local Officials and Enterprise Cross‐city Mergers and Acquisitions in China

Author

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  • Liangxiong Huang
  • Peilun Li
  • Xianbin Wang
  • Caiting Yang

Abstract

The economic impact of the geographical rotation of local officials is important in China's official management system. This study used a zero‐inflated Poisson regression model and found that the geographical rotation of local officials significantly increased cross‐city mergers and acquisitions (M&As) of enterprises. The impact of local officials' geographical rotation on M&As was more pronounced under certain conditions. These conditions included: (i) when officials were transferred from cities with a higher development level to cities with a lower development level; (ii) when the outflow cities were municipalities directly governed by the central government, provincial capitals, or separately listed cities; (iii) when the transfers of officials occurred within the same province; (iv) when the transfers took place before 2012; and (v) when the transfers happened in the years following significant central government conferences, which provided strong political incentives for M&As.

Suggested Citation

  • Liangxiong Huang & Peilun Li & Xianbin Wang & Caiting Yang, 2023. "The Geographical Rotation of Local Officials and Enterprise Cross‐city Mergers and Acquisitions in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 31(4), pages 66-89, July.
    • Handle: RePEc:bla:chinae:v:31:y:2023:i:4:p:66-89
    DOI: 10.1111/cwe.12493
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    References listed on IDEAS

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