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Takeover deterrence with state ownership: Evidence from China

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  • Su, Zhiwei
  • Xue, Yi

Abstract

This study examines the role of Chinese state ownership in deterring takeovers. We document state ownership’s reduction in firms’ susceptibility to potential takeovers. Using staggered privatization of the state-owned shareholders of public firms, as shocks to the deterrent effect of the state, we find that state-owned shareholders can insulate their portfolio firms from potential takeovers. The deterrent effect of state ownership is concentrated in strategic industries and well-functioning assets, alleviating managerial short-termism.

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  • Su, Zhiwei & Xue, Yi, 2023. "Takeover deterrence with state ownership: Evidence from China," Journal of Banking & Finance, Elsevier, vol. 146(C).
    • Handle: RePEc:eee:jbfina:v:146:y:2023:i:c:s0378426622002692
    DOI: 10.1016/j.jbankfin.2022.106689
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    References listed on IDEAS

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    More about this item

    Keywords

    Deterrence; Privatization; State-owned enterprises; Takeover;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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