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Performance and characteristics of acquiring firms in the Chinese stock markets

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  • Chi, Jing
  • Sun, Qian
  • Young, Martin

Abstract

We investigate acquiring firms of 1148 M&A in the two Chinese stock markets. Using the market model, the CAPM model and the buy-and-hold method, we find significantly positive abnormal returns before (6Â months) and upon M&A announcements, while the long-run abnormal returns (6Â months) after M&A are insignificant. Cash is the dominant payment method and the competition during M&A is low. The cross-sectional analysis shows that the political advantages of acquiring firms have a significantly positive impact on the acquirers' performance, while the economic advantages do not. Finally, cross-provincial M&A and better corporate governance create value to acquiring firms.

Suggested Citation

  • Chi, Jing & Sun, Qian & Young, Martin, 2011. "Performance and characteristics of acquiring firms in the Chinese stock markets," Emerging Markets Review, Elsevier, vol. 12(2), pages 152-170, June.
    • Handle: RePEc:eee:ememar:v:12:y:2011:i:2:p:152-170
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    M& A Acquiring firms China;

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