Performance and characteristics of acquiring firms in the Chinese stock markets

Jing Chi, Qian Sun and Martin Young

Emerging Markets Review, 2011, vol. 12, issue 2, 152-170

Abstract: We investigate acquiring firms of 1148 M&A in the two Chinese stock markets. Using the market model, the CAPM model and the buy-and-hold method, we find significantly positive abnormal returns before (6Â months) and upon M&A announcements, while the long-run abnormal returns (6Â months) after M&A are insignificant. Cash is the dominant payment method and the competition during M&A is low. The cross-sectional analysis shows that the political advantages of acquiring firms have a significantly positive impact on the acquirers' performance, while the economic advantages do not. Finally, cross-provincial M&A and better corporate governance create value to acquiring firms.

Keywords: M&; A; Acquiring; firms; China (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (31)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:12:y:2011:i:2:p:152-170

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