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Investor protection and cross-border acquisitions by Chinese listed firms: The moderating role of institutional shareholders

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  • Zhou, Jing
  • Lan, Wei

Abstract

This study examines whether-and if so, how-market value for the acquirers from emerging markets is influenced by changes in investor protection induced by acquisitions, in interaction with institutional shareholdings in acquiring firms. Using a sample of Chinese listed acquiring firms for the period 2002–2012, the empirical findings show that Chinese companies gain higher abnormal returns at the takeover period through acquisitions of targets domiciled in countries with superior investor protection to China. Interestingly, this relationship between investor protection and acquirer returns is moderated by institutional ownership in acquiring firms, which is however more prominent in nonstate-owned Chinese companies.

Suggested Citation

  • Zhou, Jing & Lan, Wei, 2018. "Investor protection and cross-border acquisitions by Chinese listed firms: The moderating role of institutional shareholders," International Review of Economics & Finance, Elsevier, vol. 56(C), pages 438-450.
    • Handle: RePEc:eee:reveco:v:56:y:2018:i:c:p:438-450
    DOI: 10.1016/j.iref.2017.12.003
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    1. Herve Alexandre & Christian At & Catherine Refait-Alexandre, 2023. "Strategic Toeholds in Takeovers," Working Papers hal-04604654, HAL.
    2. Cheng, Louis T.W. & Wang, Jacqueline Wenjie, 2021. "Equity ownership and corporate transparency: International evidence," International Review of Economics & Finance, Elsevier, vol. 76(C), pages 143-165.
    3. Song, Sangcheol & Zeng, Yuping & Zhou, Bing, 2021. "Information asymmetry, cross-listing, and post-M&A performance," Journal of Business Research, Elsevier, vol. 122(C), pages 447-457.
    4. Datta, Deepak K. & Basuil, Dynah A. & Agarwal, Ankita, 2020. "Effects of board characteristics on post-acquisition performance: A study of cross-border acquisitions by firms in the manufacturing sector," International Business Review, Elsevier, vol. 29(3).

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    More about this item

    Keywords

    Institutional shareholders; Investor protection; Corporate governance; Cross-border acquisitions; China;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General

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