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Non-controlling shareholders’ network and the reliability of merger and acquisition performance commitments: Governance or collusion?

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  • Fu, Shaozheng
  • Yang, Jinkun

Abstract

This study examines the effect of non-controlling shareholders’ network on the reliability of performance commitment (PC) agreements signed during merger and acquisitions (M&A), based on A-share listed companies in China during 2008–2022. Findings indicate that higher non-controlling shareholders’ network centrality is significantly associated with an increased PC reliability. Mechanism tests reveal that this correlation is driven by the network's embedded advantage to reduce M&A premiums and curb insider shareholding reduction. Furthermore, this study highlights that the networks of pressure-resistant institutional investors, non–state-owned legal entity shareholders, and individual investors play crucial roles in enchaining PC reliability.

Suggested Citation

  • Fu, Shaozheng & Yang, Jinkun, 2025. "Non-controlling shareholders’ network and the reliability of merger and acquisition performance commitments: Governance or collusion?," Finance Research Letters, Elsevier, vol. 71(C).
    • Handle: RePEc:eee:finlet:v:71:y:2025:i:c:s1544612324014600
    DOI: 10.1016/j.frl.2024.106431
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    More about this item

    Keywords

    Performance commitments; Non-controlling shareholders; Network centrality; Corporate governance; Merger and acquisition;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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