The long-term performance of cross-border mergers and acquisitions: Evidence from the Chinese stock market

Abstract

Purpose

The purpose of this paper is to examine Chinese firms’ long-term value creation derived from cross-border mergers and acquisitions (CBMAs).

Design/methodology/approach

The authors collected a sample of 140 CBMAs conducted by Chinese firms listed in Shenzhen and Shanghai stock markets between 1997 and 2010. Long-horizon event study methodology was used to test hypotheses.

Findings

The authors find Chinese firms gain long-term value from CBMAs. In particular, the authors find that Chinese firms tend to gain more value from targets from developed countries, and Chinese state-owned firms are more capable of gaining value from CBMAs than Chinese private firms.

Originality/value

Given Chinese firms are increasingly acquiring targets outside of China in recent years, it is still unclear about whether Chinese firms gain value from these very expensive cross-border deals. This is one of the first studies that address the question: What are the long-term performance outcomes of Chinese CBMAs in recent years?

Citation

Lan, S., Yang, F. and Zhu, H. (2015), "The long-term performance of cross-border mergers and acquisitions: Evidence from the Chinese stock market", Chinese Management Studies, Vol. 9 No. 3, pp. 385-400. https://doi.org/10.1108/CMS-10-2013-0193