A Study On The Location Choice Of Chinese Enterprises' Cross - Border M & A

The scale of Chinese enterprises’ cross-border mergers and acquisition were expanding rapidly during the past several years. Enthusiastic attention has been given to the research of Chinese enterprises cross-border M&A. As an important part of decision making progress, the location choice is vital to the whole cross-border M&A. However, systematic research on the location choice of Chinese enterprises’ cross-border M&A has up to now not yet appeared. Based on the review of location theories, FDI theories and mergers and acquisitions theories, this doctoral thesis proposed a decision-making framework of cross-border M&A’s location choice and applied it to the research on location choice of Chinese enterprises’cross-border M&A.The location choice of cross-border M&A is a kind decision-making activity. Concretely, location choice targets on realizing specific cross-border motivation and gives solution to the optimal target location among alternatives by comprehensive analysis and assessments of decisive location factors and influencing location factors and. The location choice begins with the motivation of cross-border M&A and influenced by two types of factors. Decisive location factors are determined by the motivation of cross-border M&A, which are of most significant and direct influence on the decision. And they vary with the motivations. Influencing location factors promote or impede the decision-making progress. They are closely related to the investment form of cross-border M&A and the operation costs. The significance of each decisive location factor differs with the motivation of each transaction.The study of Chinese enterprises’ cross-border M&A is on the basis of the decision-making framework of cross-border M&A’s location choice. Through referring to the relevant literature, this thesis believes that seeking natural resources, market and strategic assets are three main motivation of Chinese enterprises’ cross-border M&A. In addition to that, there are also some secondary motivation, such as institution escaping, institution hedging and back-door listing. By using the method of content analysis to 199 transactions, this thesis found that the real motivations of Chinese enterprises’ cross-border M&A are generally in accordance with theoretical analysis. The focus of market-seeking cross-border M&A is exploring new overseas market instead of avoiding trading barriers. The motivation of natural resource-seeking motivation presents a characteristic of diversification. What Chinese enterprises seek were not only energy and minerals, but also agricultural resources, forest resources and herding resources. Besides, Chinese enterprises seek synergy effects, carry out global planning, implement diversification strategy, encourage management and realize back-door listing through cross-border M&A.On the basis of three main motivations of Chinese enterprises’ cross-border M&A, we propose several hypotheses on influencing factors of the location choice of Chinese enterprises’ cross-border M&A. A panel logistic model is built for testing 909 transactions dated from Jan.1,1997 to Nov.30,2014. The outcome well supported hypotheses. In addition, we found that Chinese enterprises ignore political risks and cultural difference in their location choice of cross-border M&A.In the last part of the thesis, the problems lied in the location choice of Chinese enterprises’ cross-border M&A were pointed out. And solutions were given from the aspects of principles, methods, and tactics of cross-border M&A as well as personnel training. Finally, the thesis gave suggestions on how to choose locations for three different types of cross-border M&A.