CROSS-BORDER M&As AND FIRM VALUE: A COMPARISON OF CHINA- AND US-JAPAN M&As

Keisuke Chikamoto, Fumiko Takeda and Ai Yokoyama

Contemporary Economic Policy, 2016, vol. 34, issue 2, 352-368

Abstract: type="main" xml:id="coep12129-abs-0001"> We examine the effect of M&As conducted by U.S. and Chinese bidders (US-Japan and China-Japan M&As) on the stock prices of Japanese targets. We find that both types of M&As tend to increase the stock prices of the Japanese targets and that market reactions are significantly greater for US-Japan M&As than for China-Japan M&As. Additionally, capital participation produces greater market reactions to China-Japan M&As than other structures, while acquisition produces this effect in US-Japan M&As. Our results are consistent with previous research indicating that market reactions increase for bidders operating in a developed country with high-quality institutions and corporate governance. (JEL G32, G34)

Date: 2016
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