Chinese cross-border M&As in the “One Belt One Road” countries: The impact of Confucius Institutes

Min Liu, Cong Su, Fangfang Wang and Liangxiong Huang

China Economic Review, 2020, vol. 61, issue C

Abstract: As the “One Belt One Road” (OBOR) initiative enters a new stage of substantive construction, Chinese cross-border mergers and acquisitions (M&As) are significantly increasing in the OBOR areas. Acknowledging this trend and drawing on institutional theory, this study investigates the impact of the Confucius Institute on China's cross-border M&As in the OBOR countries. It also examines how this impact is moderated by Bilateral Investment Treaties (BITs) and by comparable superior economic development and political-institution quality between home and host countries. The findings suggest that Confucius Institutes have a positive effect on the completion of M&As in OBOR countries. The effect is greater if a host country has BITs signed with China or if it has better economic development than China. This implies that, to facilitate Chinese firms' investments in OBOR areas, China should actively participate in cultural exchange activities and the establishment of Confucius Institutes should focus on those countries that have BITs with China, or which have better economic development.

Keywords: China; “One Belt One Road”; Cross-border mergers and acquisitions; Confucius Institute; Cultural differences; Institutional theory (search for similar items in EconPapers)
JEL-codes: F21 Z13 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:61:y:2020:i:c:s1043951x20300298

DOI: 10.1016/j.chieco.2020.101432

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