The Effect of Tax System Characteristics on Cross-Border Mergers and Acquisitions

Although determinants of cross-border merger and acquisitions (M&As) have been given substantial attention in the literature, research examining the effect of tax system characteristics on cross-border M&As is more limited. Cross-border M&As have substantial tax implications for both the acquiring firm and the target firm. Because firms evaluate investments based on expected after-tax returns, I expect that managers consider potential tax savings or costs in making investment decisions across tax jurisdictions. In this study, I use hand-collected country-year-level tax system characteristics to examine tax determinants of the volume and direction of cross-border M&As. I find that tax system characteristics such as controlled foreign corporation provisions, thin capitalization provisions, and the presence of a worldwide versus territorial regime have a significant effect on cross-border M&A activity.

Enhancing Environmental Sustainability Through Corporate Governance: The Merger and Acquisition Perspective

Background: Environmental sustainability may be perceived as conflicting with economic development. Economic activities such as merger and acquisitions can contribute to resource allocation optimization, where corporate governance plays an important role in advancing environmental sustainability. Our study broadens the investigation of whether merger and acquisitions are helpful for sustainable environmental development. We attempt to reveal the mechanism by which merger and acquisitions affect sustainable development: namely, through corporate governance. Results: By employing panel data for Chinese listed companies, we reveal that merger and acquisitions have a significant positive influence on environmental sustainability. In particular, the study documents a mediating effect of corporate governance. We argue that merger and acquisitions can trigger company reorganizations and thus optimize firm structure, resulting in better corporate governance. This effect, in turn, can enhance company management in several aspects, including sustainable environmental development. Therefore, we conclude that the government can improve corporate governance by promoting board reorganizations via mergers and acquisitions, leading to better environmental sustainability. Conclusions: This paper can inspire future research avenues by shedding light on how economic development and environment sustainability can be harmonized through better corporate governance. It can also deliver research implications on corporate governance studies through merger and acquisitions.

The Impact of R&D Expenditure upon the Efficiency of M&A Deals with Hi-Tech Companies

The motives behind merger and acquisitions (M&A) are often linked with the opportunities to obtain knowledge and technologies in order to enhance the competitive advantages of companies. In particular, the acquisition of digital technologies through mergers and acquisitions with ICT companies is especially relevant. However, the efficiency of such deals is often low and calls into question the implementation of digitalization strategies of companies. In this study we employ an approach for assessing the efficiency of M&A deals with ICT companies by using the DEA method. Applying regression analysis, it was found that the high level of research and development expenses of acquirers can negatively impact the efficiency of the M&A deals with ICT companies.

The effects of inter-organizational compatibility on knowledge transfer in cross-border M&As

PurposeThe study adopts congruence theory to explore the structure of inter-organizational compatibility and its structural effects on knowledge transfer in cross-border merger and acquisitions (M&As).Design/methodology/approachThis paper built a moderated-mediation model that presented the relationship between inter-organizational compatibility and knowledge transfer. Regression analysis was conducted with 182 samples from China to examine the model and hypotheses.FindingsThe results indicate that inter-organizational compatibility is a four-dimensional construct comprising culture, strategy, routine and knowledge. Additionally, inter-organizational compatibility has structural effects on knowledge transfer. Specifically, routine compatibility mediates the relationships between cultural compatibility and knowledge transfer and between strategic compatibility and knowledge transfer. Moreover, the mediating roles are moderated by knowledge compatibility.Originality/valueThis study updates the construct and provides a comprehensive and fresh understanding of inter-organizational compatibility. Additionally, it presents the structural effects of inter-organizational compatibility on knowledge transfer.

Data-driven approach to find the best partner for merger and acquisitions in banking industry

PurposeMerger and acquisitions (M&A) is a process of restructuring two or more companies into one, a process that occurs frequently in many companies. Previous studies on M&A mainly paid attention to the potential gains from a merger, while ignored the problem of how to select the partners to merge. This paper aims to select the best partner from different candidates for a given company to merge.Design/methodology/approachEach company's historical data are used to identify each company's own production technology. With resources change, each company's new operation is restricted by its own production technology. Then, a 0–1 integer programming is proposed to select the best partner for M&A.FindingsThe banking industry involving 27 China's commercial banks is given to verify the applicability of our proposed model. The study shows the best partner selection for each bank company.Originality/valueOn the theoretical side, the study uses each company's own historical data to construct its own production technology to compressively reflect the production change after M&A. On the practical side, the study uses the proposed model to help the 27 commercial banks in China to select their best merger partner.