Operation Performance & Wealth Effects In Cross-border M&A Of Chinese Listed Companies

The paper analyzes cross-border M&As of Chinese listed bidders (non-resources) during Jun. 1, 2000 to March 31, 2004. We test the performance of merging firms with cash flow accounting and the wealth effects with event study methodology.The results show that the abnormal return to total assets and the abnormal ratio of profits become significantly positive following the mergers, which indicate that the cash flow performance and management efficiency have been improved. The wealth increase of shareholders over the -20 to +20 event window shows positive wealth effects of cross-border M&As. And we also find the wealth effects of electronic communications sector is more statistically significant than that of the electronic household appliances sector.We find the macroeconomic situation of host countries and the type of payment are positively significantly related with shareholders wealth gains of merging firms. The lower the economic growth rate of host countries in the pervious year of M&As, the more wealth our shareholders will gain. And shareholders wealth will increase with payment in cash.The paper test the impact of M&As on the growth of Chinese Listed Companies, which provide academic support for the international management of our corporations and useful suggests in making relative policies for the government sectors.