The market value effect of digital mergers and acquisitions: Evidence from China

Haodan Tang, Senhui Fang and Dianchun Jiang

Economic Modelling, 2022, vol. 116, issue C

Abstract: Digital mergers and acquisitions (M&As) are increasingly popular around the world. This study examines the effect of digital M&As on the market value of Chinese listed enterprises by combining transaction-level and firm-level datasets from 2010 to 2019. The results of event studies show that the announcement of digital M&As leads to a rise in the short- and medium-term market value of acquiring enterprises, especially the short-term effect is statistically significant. Further multivariate analyses, which employ a difference-in-differences (DID) strategy and propensity score matching (PSM) techniques, provide causal evidence that digital M&As have a positive market value effect on acquirers, which is greater than that of non-digital M&As. This effect survives a vast array of robustness checks and displays some heterogeneity. Finally, we further verify two underlying channels (i.e., innovation and analyst coverage) through which digital M&As achieve market value creation.

Keywords: Digital mergers and acquisitions; Market value; Listed enterprises (search for similar items in EconPapers)
JEL-codes: D22 G32 G34 L10 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:116:y:2022:i:c:s0264999322002462

DOI: 10.1016/j.econmod.2022.106006

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