A Study On The Performance Of Multinational M & A Of Chinese Listed Companies And Its Influencing Factors

This paper presents an in-depth analysis of the performance and its influencing factors of cross-border merger and acquisition (CBM&A) by Chinese listed firms in the period2001-2011.With the event study methodology, the short-term value implications of84CBM&A announcements by Chinese listed firms are examined. The findings indicate that Chinese equity markets react positively to CBM&A announcements, with the cumulated abnormal return positively significant at5%level for3short-term event windows, i.e.(-5,+1),(-2,+1),(-1,+1), indicates that CBM&A activities are perceived by Chinese investors as value creation for listed acquiring firms. A cross-sectional analysis also conducted to explore a range of firm-, industry-and institution-specific factors on the performance of CBM&As. The results suggest deal size, international expert hiring and high-tech firms are significantly positively influence the CARs; while the cultural proximity is significantly negative related to the value creation of the listed acquirer.Accounting study is adopted to investigating the actual long-term performance of CBM&As by examining the single financial indicator of41complete transactions by Chinese listed firm with a four-year window. The evidence indicates the average ROE of the involving Chinese listed firms experienced an insignificant decline post-deal. Comparing firms according to various influencing factors, it is suggested that the performance of state-owned firm worse-off after transaction while state-owned firms show a increasing trend in financial performance post-deal; nonmanufacturing firms outperform manufacturing firms; Acquirers with target in non Confucian cultural countries underperform firms targeted Confucian cultural countries.