Short-term value creation through cross-border M&A transactions in emerging economies

: evidence from China

Abstract

This paper investigates whether Chinese companies can achieve significant abnormal returns through cross-border M&A (CBMA) transactions and the possible reasons. The final sample consists of 119 Chinese companies listed on the Shanghai Stock Exchange (SSE) or Shenzhen Stock Exchange (SZSE) that conducted a CBMA transaction from 2010 to 2021. I could observe significant abnormal returns through CBMA transactions of 1.9% for the event window [-2,2]. For event window [0,1], a significant majority of Chinese companies (58.9%) were found to be able to generate positive abnormal returns through CBMA transactions. Furthermore, I found a significant impact on the abnormal returns of the acquiring company for particular firm- and deal specific characteristics such as the industry match of acquirer and target, the listing of the acquiring company, and the deal value in various event windows. This paper aims to contribute to the previous findings and extend the research in an updated time period. Acquiring companies can use the results of this paper to positively impact abnormal returns through specific company and transaction characteristics and minimize the risk of short-term value destruction through the CBMA transaction.

Date of Award	30 Jun 2022
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Pramuan Bunkanwanicha (Supervisor)