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The impact of state ownership, formal institutions and resource seeking on acquirers’ returns of Chinese M&A

Listed author(s):
  • Min Du

    ()

    (Leeds Beckett University)

  • Agyenim Boateng

    ()

    (Glasgow Caledonian University)

  • David Newton

    ()

    (University of Nottingham)

Registered author(s):

    Abstract We examine the effects of state ownership, institutions and resource-seeking behavior on post-acquisition stock price returns of Chinese cross-border mergers and acquisitions over the period 1998–2008. Chinese acquiring firms experience negative returns ranging from 2.92 to 10.80 % in 12- and 60-month post-event periods, respectively. State ownership (SOE), interaction between R&D and SOE, formal institutional distance and acquirer size have a positive and significant impact on the long-term acquirer returns. However, the interaction between tangible resources and SOE and acquirer cash holdings appears to have a negative and significant impact on long-term returns. Overall, our results suggest that the state and institutions constitute important sources of long-term value creation for Chinese acquirers.

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    File URL: http://link.springer.com/10.1007/s11156-015-0498-0
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    Article provided by Springer in its journal Review of Quantitative Finance and Accounting.

    Volume (Year): 47 (2016)
    Issue (Month): 1 (July)
    Pages: 159-178

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    Handle: RePEc:kap:rqfnac:v:47:y:2016:i:1:d:10.1007_s11156-015-0498-0
    DOI: 10.1007/s11156-015-0498-0
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    Order Information: Web: http://www.springer.com/finance/journal/11156/PS2

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