The targets of state capitalism: evidence from M&A deals
Stefano Clo (),
Carlo Fiorio () and
Massimo Florio ()
European Journal of Political Economy, 2017, vol. 47, issue C, 61-74
Over the last decade, particularly after the Great Recession, state-owned enterprises (SOEs) have been expanding their role in the global economy, including through merger & acquisitions (M&As). What are the characteristics of the firms targeted by SOEs? Are they different from firms controlled by private investors? By looking at a unique sample of around 25,000 M&As occurred over the period 2005–2012, we find that only SOEs controlled by means of minority of stakes (state-invested enterprises, SIEs) do not show any statistically significant difference in their targeting strategy compared to private enterprises. Conversely, majority-owned SOEs, and in particular financial SOEs buy lower performing firms compared to private acquirers. We interpret this fact as evidence of the internalization of political objectives by fully controlled and financial SOEs, but not by SIEs.
Keywords: L32; L33; G34; H82; State-owned enterprises; State-invested enterprises; Management inefficiency; Firms' performance; Worldwide mergers and acquisitions (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:47:y:2017:i:c:p:61-74
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