Institutional cross-ownership and M&A premiums: Micro evidence from China

Qingjuan Wang, Keke Bai and Yang Li

International Review of Economics & Finance, 2025, vol. 103, issue C

Abstract: Adopting micro panel data with Chinese listed firms between 2009 and 2022, this study examines the impact of Institutional Cross-ownership on acquisition premiums. The results show that common ownership significantly reduces M&A premiums, and this finding is robust to various tests and endogeneity controls. Mechanism analysis reveals that the effect operates through improved accounting quality and investment efficiency. Further evidence shows that managerial ability and perceived policy uncertainty strengthen this effect, which is more pronounced in state-owned enterprises. This study provides new micro-level evidence on institutional ownership's role in M&A pricing and offers policy implications for governance improvement.

Keywords: Institutional cross-ownership; M&A premium; Corporate governance (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:103:y:2025:i:c:s1059056025007397

DOI: 10.1016/j.iref.2025.104576

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