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Cross‐border M&As and the performance of Chinese acquiring firms

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  • Wenli Sun
  • Dan Xie

Abstract

This paper investigates the performance of Chinese acquirers in cross‐border mergers and acquisitions (M&As) between 2010 and 2018. Compared to domestic acquirers, the paper finds no significant improvement in labour productivity nor total factor productivity (TFP) within two years after acquisitions. However, firms engaged in foreign acquisitions witness an increase in total sales, employ more labour and accumulate more capital up to two years after transactions. The effects are more pronounced in deals in developed destinations relative to less‐developed countries. Heterogeneous effects are explored across various industries, as well as deal structures. The results imply that outward cross‐border M&As in China are not driven by productivity improvement but rather scale effects.

Suggested Citation

  • Wenli Sun & Dan Xie, 2022. "Cross‐border M&As and the performance of Chinese acquiring firms," The World Economy, Wiley Blackwell, vol. 45(5), pages 1614-1647, May.
    • Handle: RePEc:bla:worlde:v:45:y:2022:i:5:p:1614-1647
    DOI: 10.1111/twec.13200
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