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Do M&A funds create value in Chinese listed firms?

Author

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  • Huang, Ying Sophie
  • Guo, Feng
  • Ma, Lina

Abstract

This study examines the impact of the establishment of mergers and acquisitions (M&A) funds by Chinese listed firms and their subsequent investments on the stock market value of these firms. The results indicate that M&A funds, in general, do not create value for listed firms. The investments made by these funds also have a dampening effect on the market value of listed firms, particularly when investor sentiment is high, which leads to lower short-term stock returns. However, this negative effect diminishes during stronger overall market conditions. These findings suggest that listed firms need to address market perception challenges associated with M&A funds.

Suggested Citation

  • Huang, Ying Sophie & Guo, Feng & Ma, Lina, 2023. "Do M&A funds create value in Chinese listed firms?," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    • Handle: RePEc:eee:pacfin:v:79:y:2023:i:c:s0927538x23001014
    DOI: 10.1016/j.pacfin.2023.102035
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    More about this item

    Keywords

    M&A funds; Stock returns; Stock liquidity; Investor sentiment;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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