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Have the Chinese national oil companies paid too much in overseas asset acquisitions?

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  • Mu, Xiaoyi

Abstract

This paper provides both a quantitative and qualitative analysis of whether the Chinese national oil companies have “overpaid” than their international counterparts in overseas asset acquisitions during 2001–2017. Using a hedonic pricing framework, we find that while the Chinese companies did not pay more than international oil companies for the period of 2001–2008, there is statistically significant evidence that they overpaid during the 2009–2016 period. A counterfactual analysis was conducted to quantify the extent of the overpayment. Interviews and qualitative analysis suggest that the overpayment mainly results from a rush to gain projects in a period of high oil prices and easier bank loans after the global financial crisis rather than concerns about energy security or other political considerations.

Suggested Citation

  • Mu, Xiaoyi, 2024. "Have the Chinese national oil companies paid too much in overseas asset acquisitions?," International Review of Financial Analysis, Elsevier, vol. 92(C).
    • Handle: RePEc:eee:finana:v:92:y:2024:i:c:s1057521924000061
    DOI: 10.1016/j.irfa.2024.103074
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    More about this item

    Keywords

    China; National oil companies; Exceptionalism; Reserve valuation; Outward direct investment; Asset acquisition; Corporate governance;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism

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