Private Versus State Ownership and Spillover of Investor Protection Standards in Interprovince Mergers: Evidence from China's Emerging Market

Hongbo Pan, Donghui Li, Xinping Xia and Minggui Yu

Emerging Markets Finance and Trade, 2010, vol. 46, issue 6, 86-105

Abstract: This paper examines the spillover effects of investor protection standards for interprovince mergers in China's emerging markets. Using a sample of 372 mergers, we find that if the provincial investor protection of the acquirer is better than that of the target, a privately owned acquirer will get significantly higher abnormal returns, whereas a local state-owned acquirer will not. Additional evidence indicates that in contrast to the crossborder acquirers or the private acquirers, the local state-owned acquirers in interprovince mergers come from provinces with worse fiscal conditions and prefer to acquire targets in provinces with better investor protection or fiscal conditions.

Keywords: interprovince mergers; investor protection; state-owned acquirers (search for similar items in EconPapers)
Date: 2010
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