Do M&A funds create value in Chinese listed firms?

Ying Sophie Huang, Feng Guo and Lina Ma

Pacific-Basin Finance Journal, 2023, vol. 79, issue C

Abstract: This study examines the impact of the establishment of mergers and acquisitions (M&A) funds by Chinese listed firms and their subsequent investments on the stock market value of these firms. The results indicate that M&A funds, in general, do not create value for listed firms. The investments made by these funds also have a dampening effect on the market value of listed firms, particularly when investor sentiment is high, which leads to lower short-term stock returns. However, this negative effect diminishes during stronger overall market conditions. These findings suggest that listed firms need to address market perception challenges associated with M&A funds.

Keywords: M&A funds; Stock returns; Stock liquidity; Investor sentiment (search for similar items in EconPapers)
JEL-codes: G11 G14 G34 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:79:y:2023:i:c:s0927538x23001014

DOI: 10.1016/j.pacfin.2023.102035

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