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Impact of overseas M&As on Chinese service enterprises’ market value

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  • Hao Lu
  • Jin Hong
  • Qiong Chen
  • Ping Deng

Abstract

China’s services sector mergers and acquisitions (M&As) in emerging economies, such as the Belt and Road Strip (BRS), have been increasing rapidly. Past studies have focused on M&A market value performance (MVP) in developed regions and industry sectors, ignoring M&As in emerging economies and services sectors. Drawing on signal theory effects of M&A announcements on MVP, this study assessed the performance of Chinese stock market reactions to M&A announcements and the key factors in M&A MVP in emerging economies and service sectors. The study is based on an event study of a sample of Chinese service sector M&A announcements in the BRS during the years 2013–2017. The findings indicate that China’s service sector M&As in the BRS have achieved significantly positive MVP since 2013. MVP was statistically significant only in the technology services and public services sub-sectors. M&A contract size was positively related to service sector M&A MVP. The authors discuss implications of the study findings for future research and managerial practice.

Suggested Citation

  • Hao Lu & Jin Hong & Qiong Chen & Ping Deng, 2022. "Impact of overseas M&As on Chinese service enterprises’ market value," The Service Industries Journal, Taylor & Francis Journals, vol. 42(15-16), pages 1256-1276, December.
    • Handle: RePEc:taf:servic:v:42:y:2022:i:15-16:p:1256-1276
    DOI: 10.1080/02642069.2019.1608189
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