Does financing of Chinese mergers and acquisitions have “Chinese characteristics”?

Lulu Gu and W. Reed ()

Economics Letters, 2016, vol. 139, issue C, 11-14

Abstract: This paper analyzes the financing of Chinese mergers and acquisitions. It is motivated by two issues associated with characteristic features of the Chinese economy. First, foreign ownership restrictions can potentially inhibit Chinese acquiring firms’ use of equity to finance overseas M&A deals. Second, the ability of state-owned enterprises (SOEs) to secure favorable loan terms may provide them an incentive to rely more on cash financing. We collate data from four databases to obtain a sample of over 6000 M&A deals that were completed during the 1997–2014 period. We find evidence to support the first supposition but not the second.

Keywords: Mergers and acquisitions (M&As); Foreign ownership restrictions; State owned enterprises (SOEs); M&A financing; Chinese firms (search for similar items in EconPapers)
JEL-codes: G28 G34 N20 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Working Paper: Does Financing of Chinese Mergers and Acquisitions Have “Chinese Characteristics”? (2015)
Working Paper: Does Financing of Chinese Mergers and Acquisitions Have “Chinese Characteristics”? (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:139:y:2016:i:c:p:11-14

DOI: 10.1016/j.econlet.2015.11.036

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