IDEAS home Printed from https://ideas.repec.org/a/hin/complx/8298451.html
   My bibliography  Save this article

Optimal Decision-Making in Chinese Cross-Border Mergers and Acquisitions: A Perspective of Overbidding

Author

Listed:
  • Yanping Bao
  • Chan Lyu
  • Xia Wu
  • Jun Lian
  • Yu Zhou

Abstract

Chinese domestic firms engage actively in the cross-border merger and acquisition (CBMA) markets, which are crucial in China’s foreign investment economics. Acquisition premium has attracted stakeholders’ attention to determine whether the CBMA decision is optimal. This study employs a novel model to assess decision-making efficiency by overbidding based on a profit maximization assumption. Based on the Chinese CBMA transaction data from 2009 to 2019 of Chinese acquiring firms, the descriptive analysis indicates the widespread overbidding phenomenon in Chinese CBMAs. Moreover, empirical findings reveal that SOEs (vs. non-SOEs) experience less overbidding among acquiring firms. This study also shows that firms from the high-tech industry tend to be less overbidding (more efficient) in the CBMAs’ setting. The findings may have policy implications for China’s outward investment efficiency.

Suggested Citation

  • Yanping Bao & Chan Lyu & Xia Wu & Jun Lian & Yu Zhou, 2022. "Optimal Decision-Making in Chinese Cross-Border Mergers and Acquisitions: A Perspective of Overbidding," Complexity, Hindawi, vol. 2022, pages 1-13, September.
    • Handle: RePEc:hin:complx:8298451
    DOI: 10.1155/2022/8298451
    as

    Download full text from publisher

    File URL: http://downloads.hindawi.com/journals/complexity/2022/8298451.pdf
    Download Restriction: no
    File URL: http://downloads.hindawi.com/journals/complexity/2022/8298451.xml
    Download Restriction: no
    File URL: https://libkey.io/10.1155/2022/8298451?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Guo, Jianquan & Cheng, He, 2024. "Performance feedback on sales growth and M&A: Evidence from China," Japan and the World Economy, Elsevier, vol. 69(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hin:complx:8298451. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mohamed Abdelhakeem (email available below). General contact details of provider: https://www.hindawi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.