Chinese Companies Have Chosen To Cross-border Mergers And Acquisitions Factors Affecting Study

Multinational enterprises may choose to invest internationally through Greenfield investment or acquisition. The amount through acquisition of China was increasing after 21 century. More and more Chinese multinational enterprises realize the advantage of cross-border M&A, and want to choice acquisition when they decided to invest in foreign country.The goal of this study is to analyze the factors which might indicate a propensity to acquire rather than Greenfield investment to our multinational enterprise. The study use empirical method and use 8 variables related to investing firm, such as growing ratio of investing firm, size of investing firm, R&D intensity, degree of diversity, international experience, experience specific to the target country, cultural distance and level of development in the target country. The study sample is cross-border M&A of Chinese listed bidders (non-resources) during Jun.1,2000 to June 30,2005. The results show 5 variables will effect the propensity to acquire of Chinese firms, such as growing ratio of investing firm, degree of diversity, experience specific to the target country, cultural distance and level of development in the target country.