Does being included in an entity list enhance regulated firms’ mergers and acquisitions? Evidence from Chinese high-tech firms

Bingyang Liu, Liyang Xiong, Minghui Wang and Yanqi Sun

Finance Research Letters, 2024, vol. 62, issue PB

Abstract: Using a sample of Chinese high-tech firms, we document that firms included in the entity list by the U.S. enhance their mergers and acquisitions (M&As) investments. Mechanism tests indicate that the inclusion of Chinese firms in the entity list has disrupted their reliance on imported factors of production, thereby motivating their M&A decisions that aim to secure resources. Additional tests show that being included in the entity list motivates firms to enhance specific types of M&As such as technological and domestic M&As. Meanwhile, national industrial policy plays an important role in supporting these firms’ M&As.

Keywords: Entity list; Mergers and acquisitions; Trade war; Factor of production (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:62:y:2024:i:pb:s1544612324002435

DOI: 10.1016/j.frl.2024.105213

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