Acquiring Capacity and Acquiring Behavior of Chinese Firms

Jianguo Chen, Jing Chi and Shu Zhu
Additional contact information
Jianguo Chen: Massey University
Jing Chi: Massey University

Journal of Entrepreneurial Finance, 2009, vol. 12, issue 4, 87-104

Abstract: China's short stock market history has already seen three merger waves, yet little is known of the performance drivers of acquirers. Using an acquirer's announced target value as the proxy of the firm's acquiring capacity, the link between that and its operational and/or financial conditions was investigated. Cash reserve ratio was significant in determining capacity: a firm with a higher cash ratio will, on average, take a larger target firm in both absolute value and relative measure. A larger acquirer size is associated with a larger takeover size, but a lesser target ratio is relative to the size of the acquirer. Firms' debt and profitability ratios do not explain the target size.

Keywords: Firm; Firms; Merger; Takeover (search for similar items in EconPapers)
JEL-codes: G32 G34 L25 M13 P31 (search for similar items in EconPapers)
Date: 2009
References: Add references at CitEc
Citations:

Downloads: (external link)
http://jefsite.org/RePEc/pep/journl/jef-2009-12-4-f-chen.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pep:journl:v:12:y:2009:i:4:p:87-104

Access Statistics for this article

More articles in Journal of Entrepreneurial Finance from Pepperdine University, Graziadio School of Business and Management Contact information at EDIRC.
Bibliographic data for series maintained by Craig Everett ().