Research On Cross-Border Mergers And Acquisitions Performance Of Chinese A-Share Listed Companies

Cross-border mergers and acquisitions(CM&As)have become a popular strategic choice for companies to rapidly develop and acquire new resources,skills,and market shares in response to rapidly changing global market demands.China is the largest foreign investor in emerging economies.Chinese companies are playing an increasingly important role in the global market.Many Chinese companies have sufficient capital and market competitiveness.Cross-border M&A transactions by Chinese companies are continuously rising.As a global management strategy,CM&As have attracted more and more scholars' attention.A core issue in M&A is whether it can generate performance/value for the acquirer.The crossborder merger and acquisition process includes two stages,which are pre-and post-merger stage.All the value creation is happened after the merger is completed.In terms of value creation,most M&As have undermined companies' value,however there are still so many M&As happening,then what are the factors behind their poor performance.Therefore,it is necessary to explore the factors that affect M&A performance.However,the entire process of mergers and acquisitions is continuous,and each stage does not exist in isolation.The public acquisition period in the premerger stage is subject to approval,communication,and negotiation,including discussions on integration issues that will happen in the post-merger stage.A series of procedures or events will affect the transaction costs of mergers and acquisitions,and the value creation during the integration stage.The completion or cancellation of the M&A transaction indicates whether the M&A can enter the post-merger stage,that is,the completion of the transaction is a prerequisite for entering the post-merger integration stage.Therefore,the pre-merger phase is closely related to the post-merger phase,and the research on the pre-merger phase is the basis for the research on the post-merger integration phase.Based on this,before analyzing the influencing factors of M&A performance,this dissertation analyzes the factors that affect the duration of the transaction in the pre-merger stage(the time interval from the announcement of the transaction to completion or cancellation),and that affect the success or failure of the transaction,and the connection between pre-and post-merger stages.Existing studies have analyzed the influencing factors of different stages of M&A separately,lacking a systematic analysis of CM&A transactions from the perspective of the whole process.In order to provide a more comprehensive research perspective,based on the existing research,this dissertation explores the entire process model of CM&As of Chinese listed companies,and mainly studies the different stages and the influencing factors of CM&As through four studies.Firstly,previous studies have not paid enough attention to the duration of the transaction.The first study enriches the research on the pre-merger stage by examining the influencing factors of the duration of the public acquisition period in the pre-merger stage.Although a few scholars have studied this issue,they have ignored the important impact of resource relatedness.This study is mainly based on the resource-based view and institutional theory.It takes CM&A transactions announced by Chinese listed companies before December 31,2017 as research sample and analyzes the impact of resource relatedness and institutional distance on transaction duration.It enriches the research on the application of the resource-based view in the pre-merger stage,and on the other hand,it also enriches the research on the duration of the public acquisition period before the merger.At the same time,this study explores the moderating role of corporate market-seeking motive and M&A advisor based on the motive theory and social capital theory.The research results show that the relationship between resource relatedness and transaction duration is U-shaped;formal institutional distance and cultural distance both negatively affect the duration of M&A transactions;the engagement of professional M&A advisor can strengthen the negative impact of cultural distance on transaction duration;The stronger the market-seeking motive of the acquirer,the easier it is to reduce the negative impact of resource relatedness on the duration of the transaction.In addition,in order to explore the correlation between the pre-and post-merger stages,this study examined the impact of transaction duration on M&A performance.The results showed that the longer the duration,the higher the M&A performance,which further expands the research on M&A performance and provides an important perspective for the integrative research about M&A process.The second study analyzes the factors that affect the success or failure of M&A transactions at the national,corporate,and industry levels,further enriching the research on the success or failure of pre-merger stage.At present,the research on the success or failure of M&A has been relatively comprehensive,but there is no research on the impact of resource relatedness.Based on the resource-based view,this article introduces resource relatedness and enriches the application of resource-based view.This study takes cross-border M&A transactions announced by Chinese listed companies before December 31,2017 as research samples,and explores the influence of resource relatedness,institutional distance,and experience to M&A success based on the resourcebased view,institutional theory,and organizational learning theory,and also analyzes the impact of the target's listing status and the nature of its industry.The research results show that resource relatedness positively affects the success rate of M&A transactions;institutional distance does not significantly affect the success or failure of transactions;M&A experience negatively affects the success rate of M&A transactions;a listed target company negatively affect the completion of the transaction;acquiring a target company belonging to the natural resources industry is also not conducive to the completion of M&A transactions.Regarding the research on post-merger performance,the third study first analyzes the impact of resource relatedness and institutional distance on merger performance.On the one hand,it tests the direct impact of these two factors,which enriches the current research on merger performance.On the other hand,the influence of the interaction terms of these two factors on the performance of mergers and acquisitions was examined,the integrated research of the resource-based view and the institutional theory was extended to expand the related research of these two theories.This study takes cross-border M&A transactions completed by Chinese listed companies before December 31,2016 as research sample.The results show that resource relatedness negatively affects M&A performance;formal institutional distance and cultural distance both negatively affect M&A performance;resource relatedness can reduce the negative impact of formal institutional distance and cultural distance on M&A performance,indicating that resource relatedness and institutional distance can complement each other,and make positive impact on M&A performance.Regarding the research on post-merger performance,the fourth study adds the integration factor,and then mainly analyzes the mediating role of post-merger structural integration factor,and further expands the related research on M&A integration and performance.The post-merger integration phase is a critical stage for the M&A performance.Institutional distance is usually considered as an obstacle to integration.Research on post-merger integration can provide more insights for value creation.Based on the institutional theory,this study takes cross-border M&A transactions completed by Chinese listed companies before December 31,2016 as a research sample.It attempts to analyze the impact of formal institutional distance on M&A performance through structural integration,and then tests the moderating role of acquirer's state-ownership and executives' political connections.The results show that formal institutional distance has a direct negative impact on M&A performance,and institutional distance has an indirect positive effect on M&A performance through the mediating role of structural integration.At the same time,the existence of structural integration will significantly increase the negative correlation between formal institutional distance and M&A performance,indicating that the mechanism of structural integration between formal institutional distance and M&A performance is the ‘suppression effect'.In addition,the state-ownership of the acquirer can reduce the direct negative impact of formal institutional distance on performance;the political connections of the executives of the acquirer can strengthen the negative impact of formal institutional distance on structural integration.Finally,this dissertation summarizes the conclusions of the four studies,explores possible contributions and research implications,and discusses the limitations of this research and possible future research directions.