The Research On The Motivation Of Chinese Manufacturing Cross-border Mergers And Acquisitions

With the further development of economic globalization,more and more Chinese manufacturing industry realize internationalization by means of cross-border mergers and acquisitions.Cross-border M&A gradually become the major method of Chinese outward foreign direct investment.China is the largest developing country in the world and its total economic output has occupied second place worldwide.However,China has a small number of multinational companies,and the overall level of cross-border M&A is relatively low.In2012,debt crisis in Europe brought many adverse effects to Chinese economy.Meanwhile,this crisis brought opportunities as well.China enjoys the world’s first foreign exchange reserves and foreign assets become lower prices because of RMB appreciation.These create a good external environment for Chinese corporate cross-border M&A.Chinese manufacturing industry by means of cross-border M&A can also relatively easily obtain overseas resources、technology、market and strategic assets,improving the international competitiveness.This paper is aim to analyze the motivation of Chinese manufacturing industry cross-border M&A.First,this paper analyzes the status of Chinese manufacturing industry cross-border M&A.Through collecting cases of cross-border M&A for the period from2001to2011,the author summarizes the the subject composition,location,industries and sectors of cross-border M&A of Chinese manufacturing industry.According to statistics,chart and figures,we realize that the state-owned enterprises are the main part.The area is mainly in the Asia,Europe and America. Secondary and tertiary industries is the focus industry of Chinese manufacturing industry cross-border M&A.The motivations of Chinese manufacturing industry Overseas M&A is the emphasis of this article.This paper divides the motivations into two levels called external and internal motivation.In the research on the external motivation,this paper attempts to use1993-2011relevant macro data,the amount of Chinese manufacturing industry cross-border M&A to be dependent variable,per capita GDP、the amount of foreign exchange reserves and exports to be the independent variables,through the relevant granger causality test and multivariate linear regression method,author does empirical test on external drivers for Chinese corporate cross-border M&A.The results show that the per capita GDP、the foreign exchange reserves and export are promoting Chinese manufacturing industry transnational M&A.Among these factors,the per capita GDP plays the most obvious role in Chinese manufacturing industry Overseas M&A.In the meanwhile,the foreign exchange reserves and export are also playing a positive role.On the internal motivations of Chinese manufacturing industry Overseas M&A,the author discuss the enterprises’ behavior of acquiring resource、technology、market and strategic assets from the microcosmic perspective.Then it analyzes the typical case---The subsidiary of Zhejiang Geely Holding Group takes over the Sweden Volvo Car Corporation and reveals the reason that Chinese manufacturing industry acquire the enterprises of developed countries---the reverse investment behavior.In order to encourage and promote the Chinese manufacturing sector cross-border mergers and acquisitions, Based on the above analysis, proposed a series of specific policy measures, these measures for fiscal and financial support, IT assistance and talents.