The effect of target information on the payment method during M&As: Evidence from China

Yan Zhang, Tu Ho, Jin Roc Lv and Emma Schultz

Pacific-Basin Finance Journal, 2020, vol. 59, issue C

Abstract: We investigate the effect of target information on the M&A deal payment method in China. First, in our replication using the US data, the positive relation between target information and the use of stock payment is consistent with the existing literature, validating our empirical method. Second, our replication using the Chinese data provides weak support, if any, for the rational payment theory. Only one out of four target information proxies is positively related to the use of stock payment. Third, we explore the causes for the different empirical results when using the US and the Chinese samples and find that the effect of target information on the payment method highly depends on whether the acquirer is a state-owned enterprise.

Keywords: Chinese M&As; Payment method; Stock payment (search for similar items in EconPapers)
JEL-codes: D82 G14 G34 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:59:y:2020:i:c:s0927538x19305785

DOI: 10.1016/j.pacfin.2020.101263

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