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

Lulu Gu and W. Reed

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

Abstract: This paper analyzes the financing of Chinese mergers and acquisitions. It is motivated by two issues associated with characteristic features of the Chinese economy. First, foreign ownership restrictions can potentially inhibit Chinese acquiring firms’ use of equity to finance overseas M&A deals. Second, the ability of state-owned enterprizes (SOEs) to secure favorable loan terms may provide them an incentive to rely more on cash financing. 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 evidence to support the first supposition 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: 13 pages
Date: 2015-11-09
New Economics Papers: this item is included in nep-cfn, nep-cna, nep-com and nep-tra
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https://repec.canterbury.ac.nz/cbt/econwp/1517.pdf (application/pdf)

Related works:
Journal Article: Does financing of Chinese mergers and acquisitions have “Chinese characteristics”? (2016) Downloads
Working Paper: Does Financing of Chinese Mergers and Acquisitions Have “Chinese Characteristics”? (2015) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:cbt:econwp:15/17

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