Cross-border Acquisitions and Shareholder Wealth: Evidence from China During 2000-2013

CHANG, Zhenghao (2014) Cross-border Acquisitions and Shareholder Wealth: Evidence from China During 2000-2013. [Dissertation (University of Nottingham only)] (Unpublished)

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Abstract

This study investigates the shareholders’ wealth effects of cross-border acquisitions (CBAs) of Chinese and foreign acquiring companies. We identify 191 CBAs with foreign targets of Chinese acquirers and 426 CBAs with Chinese targets of foreign acquirers during the period January 2000 through December 2013.

Our results based on short-term event study reveal that Chinese acquiring firms generate significant positive abnormal returns of 5.09% at the [-30,+1] event window and foreign acquiring companies generate significant positive abnormal returns of 3.70% at the [-1,+1] event window. We find significant pre-event returns for Chinese bidder. This indicates possible leakages in the information system, which may not be surprising given the emerging nature of China markets.

Additionally, in the cross-sectional regression analysis, Chinese bidders’ returns are positively correlated with prior experience on CBAs to acquire foreign companies and relatedness of industry sectors. Foreign bidders’ returns are negatively correlated with the deal size of CBAs, prior experience on CBAs to acquire Chinese firms and the method of payment by cash. Meanwhile, returns of foreign bidders are positively correlated with if the bidders come from the consumer, non-cyclical sectors and the yearly growth rate of China’s GDP.

Item Type: Dissertation (University of Nottingham only)
Depositing User: EP, Services
Date Deposited: 11 Nov 2014 16:33
Last Modified: 24 Oct 2016 06:12
URI: http://eprints.nottingham.ac.uk/id/eprint/27394

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