An Analysis Of Factors Affecting Cross-border M&A Deal Based On Liability Of Foreignness

Cross-border M&A is of great significance for Chinese enterprises’growth and national economic development, thus studies on cross-border M&A of Chinese enterprises is very important. In recent years, the number and transaction amount of cross-border M&A of Chinese enterprises are rising year by year, but it can not be ignored that the success rate of Chinese enterprise’s cross-border M&A is still low. Through analyzing the cases of Chinese enterprises’cross-border M&A, we find that the failure of Chinese enterprises’ cross-border M&A is not only from the cross-border M&A integration, but also from the stage of cross-border M&A deal. At present, studies on the influencing factors mainly focus on the stage of cross-border M&A integration or the whole process of cross-border M&A, but studies on the influencing factors of Chinese enterprises’cross-border M&A deal stage are relatively few. At the same time, the existing researches mostly use large sample test, lack of exploratory research in China context. These studies use of Cross-border M&A theory, and there is a blank in studies on influencing factors of Chinese enterprises’ cross-border M&A from liability of foreignness. Therefore, this article identifies research topic as using the research method of exploratory case to analyze influencing factors of Chinese enterprises’ cross-border M&A from liability of foreignness.With the aid of qualitative analysis software NVIVO10.0, this paper uses the grounded theory to analyze the cases of cross-border M&A deal of six Chinese enterprises which are Huawei, Geely, NWII(Northwest Nonferrous International Investment Company Ltd), CNOOC(China National Offshore Oil Corporation), Shuanghui and Wanxiang. Through opening coding, axial coding and selective coding, we get 122 concepts and 55 categories. And then, the paper summarizes these categories as 17 main categories and 8 core categories. As a result, the paper gets 7 influencing factors of Chinese enterprises’ cross-border M&A deal. On this basis, the article also analyzes the importance of the influencing factors, identifies the key factors and general influencing factors of cross-border M&A deal, analyzes the context of influencing factors and how these factors affect the deal of cross-border M&A, and constructs the model of factors affecting cross-border M&A deals. At last, this paper summarizes the research findings, compares them with the existing research and highlights the contribution.Through case studying, it is found that (1)the influencing factors of cross-border M&A deal include legitimacy, unfamiliarity, stakeholder of host country, M&A capability, M&A Characteristics, relational network, M&A outlook. (2)Among these factors, legitimacy, unfamiliarity, stakeholder of host country and M&A capability have a significant impact on Cross-border M&A deal, so they are identified as the key influencing factors of Cross-border M&A deal. M&A Characteristics, relational network and M&A outlook’s influence is lower than other four factors, so they are classified as general influencing factors of cross-border M&A deal. (3)Every influencing factors have some main categories and categories, and affect the deal of cross-border M&A through these son categories. (4)According to the research conclusion, this article also puts forward some advice to increase the success rate of Chinese enterprises’Cross-border M&A deal from the national and enterprise angle.