Does Financing of Chinese Mergers and Acquisitions Have “Chinese Characteristics”?

Lulu Gu and W. Reed (bob.reed@canterbury.ac.nz)

Working Papers in Economics from University of Canterbury, Department of Economics and Finance

Abstract: This paper investigates two hypotheses about Chinese financing of mergers and acquisitions (M&As). The first hypothesis is that foreign ownership restrictions by the government cause Chinese acquirers to rely more on cash to finance their overseas M&A deals. The second hypothesis is that state-owned enterprizes (SOEs) will rely more on cash to finance their M&A deals because they are able to secure better borrowing terms. We collate data from four databases to obtain a sample of over 6000 M&A deals that were completed during the 1997-2014 period. We find strong evidence to support the first hypothesis but not the second.

Keywords: Mergers and acquisitions (M&As); foreign ownership restrictions; state owned enterprises (SOEs); M&A financing; Chinese firms (search for similar items in EconPapers)
JEL-codes: G28 G34 N20 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2015-06-22
New Economics Papers: this item is included in nep-cfn, nep-cna, nep-com and nep-tra
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Downloads: (external link)
https://repec.canterbury.ac.nz/cbt/econwp/1512.pdf (application/pdf)

Related works:
Journal Article: Does financing of Chinese mergers and acquisitions have “Chinese characteristics”? (2016)
Working Paper: Does Financing of Chinese Mergers and Acquisitions Have “Chinese Characteristics”? (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:cbt:econwp:15/12

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