The Influence Of Host Country's Institutional Environment On Performance Of Cross-border Mergers And Acquisitions By Chinese Listed Companies

In the context of the economic globalization,coupled with China's economic development and the "going global" strategy,China's cross-border M&A activities become more and more active.Chinese enterprises are playing an increasingly important role in the cross-border mergers and acquisitions.Despite the increasing scale of cross-border mergers and acquisitions implemented by Chinese enterprises,the failure rate of cross-border mergers and acquisitions is still high.Summarizing the practical experience of Chinese enterprises,we find that the uncertainties of host country's political system,the change of economic environment,and the aggravation of ethnic culture conflict have increased the possibility of failure.And our country is transformed from the planned economy system,the management ways are different from the western countries.Therefore,the transnational operation of Chinese enterprises can not be prevented from the influence of the host country's system environment.Therefore,exploring the influence of host country's institutional environment on the performance of cross-border mergers and acquisitions is of great theoretical and practical significance to improve the success rate of cross-border mergers and acquisitions of Chinese enterprises.Based on the theoretical and empirical research methods,this paper examines the influence of host country's institutional environment on the performance of cross-border mergers and acquisitions from three aspects:political system,economic system and cultural system.On the basis of reviewing and evaluating the related research literature,this paper puts forward the hypothesis of empirical research in combination with the theory of strategic environment,institutional foundation,and outsider's inferiority.The performance of Chinese enterprises'transnational mergers and acquisitions is measured by financial indicators.The quality of the political system is measured by the governance level of the host country.Through host country's degree of economic liberalization and economic competitiveness,we examine the quality of economic system.The cultural system is measured by the cultural differences between two countries.Then the multiple linear regression analysis is carried out.The sample is the transnational merger and acquisition of Chinese listed companies listed in Shanghai and Shenzhen from 2006 to 2015.Through empirical research,we draw the conclusion.The more perfect the host country's political system is,the higher the government's governance level is.It can improve the performance of Chinese enterprises' transnational merger and acquisition.The higher degree of economic liberalization and economic competitiveness of the host country is benefit for improving the performance of Chinese enterprises' transnational mergers and acquisitions.Cultural differences between China and host countries have no significant impact on the performance of transnational mergers and acquisitions.The improvement and innovation of this article are embodied in the following two aspects.On the one hand,improve the index system for the assessment of institutional factors.Most of previous studies used single indicators to measure the system environment.This paper evaluates the host country's institutional environment from three aspects,which are political system,economic system and cultural system,so as to ensure the systematicness and comprehensiveness of the research.On the other hand,this paper examines the performance through two aspects,which are performance change in the year of transnational merger and acquisition and the change in one year after transnational merger and acquisition,so as to ensure that the conclusion is more reliable.