Purpose
– The purpose of this paper is to examine Chinese firms’ long-term value creation derived from cross-border mergers and acquisitions (CBMAs).
Design/methodology/approach
– The authors collected a sample of 140 CBMAs conducted by Chinese firms listed in Shenzhen and Shanghai stock markets between 1997 and 2010. Long-horizon event study methodology was used to test hypotheses.
Findings
– The authors find Chinese firms gain long-term value from CBMAs. In particular, the authors find that Chinese firms tend to gain more value from targets from developed countries, and Chinese state-owned firms are more capable of gaining value from CBMAs than Chinese private firms.
Originality/value
– Given Chinese firms are increasingly acquiring targets outside of China in recent years, it is still unclear about whether Chinese firms gain value from these very expensive cross-border deals. This is one of the first studies that address the question: What are the long-term performance outcomes of Chinese CBMAs in recent years?
Motives, governance, and long-term performance of mergers and acquisitions in Asia
