Related party M&A, goodwill impairment and stock price crash risk: Evidence from Chinese capital market

Lingjuan Xu, Bindan Zhang, Luu Duc Toan Huynh and Peng-Fei Dai

International Review of Financial Analysis, 2024, vol. 95, issue PC

Abstract: This article takes A-share market M&A cases from 2010 to 2022 as samples to investigate the influence mechanism of related M&A, goodwill impairment and the risk of the stock price crash, and the differences of the above effects in different industries. The study finds that related M&A presents a higher premium rate in the asset-light industry, which deepens the risk of goodwill impairment and brings a greater stock price crash risk. Further research shows that frequent related M&A behavior deepen the positive correlation between goodwill impairment and stock price crash risk. The enhancement effect is pronounced in the asset-light industry. This paper deepens the comprehensive understanding of related M&A and enriches the related research on goodwill impairment, which makes it specific reference value to small and medium investors.

Keywords: Related party M&A; M&A goodwill; Goodwill impairment; Stock price crash risk (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:95:y:2024:i:pc:s105752192400396x

DOI: 10.1016/j.irfa.2024.103464

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