Determinants of Cross-Border Mergers and Acquisitions Performance of Chinese Enterprises.
[Dissertation (University of Nottingham only)]
The cross-border mergers and acquisitions (M&A) in developing countries such as China have become increasingly popular in recent years, but few papers focused on cross-border M&A from the view point of companies in developing countries. This paper is based statistics model to evaluate the major determinants of post Cross-Border M&A performance. Through quantitative evaluation and calculation, it will identify different kinds of factors in the model and find out whether and how these variables impact the research result simultaneously. This paper evaluates the extent to which these inside and outside factors will give a reference for the decision making of Chinese firms to merge oversea companies.
The amount of cross-border M&A launched by Chinese enterprises has been increasing dramatically in recent years. China has acted more and more important part in the worldwide FDI. Under the flourishing M&A deal, scholars began to investigate popular and significant factors that influence post M&A performance both in academic field and practices. The thesis tried to answer these questions through empirical research and analysis.
The following came from the results of empirical research:
The experience of oversea M&A, the category, the country or area target enterprise belonging to, the motivation and the largest shareholders’ nature had significant influence on short term performance. The experience’s statistics related coefficient was negative, which meant that more oversea M&A experience brought worse short term performance and there existed positive significant relationship between the other factors and short term performance.
As to the long term performance, almost the same factors had significant influence. Among these factors, all except technology motivation had positive influence. More specifically, the experience had positive significant influence; the assets M&As got better short time performance than mock equity M&As, while there is no influence on long term influence and the largest shareholder was circulating stock got the same results, but the M&As motivated by technology was worse, got negative performance in long term; Acquiring the enterprises Asian-Australia region was most satisfying, that is to say, they got positive significant performance in both short and long time.
Besides the above five factors, the article also tested the industries M&As and target enterprises belonging to and the size of oversea M&As, but they the statistics results did not appear significant influence on short term and long term performance. In addition, for the further analysis, the article chose the macro economy factors – the growth rate of GDP and the exchange rate innovation, while it is a pity that there is no significant relationship between the both factors and the performance, whatever is short term or long term.
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