Financial Deepening And Cross-border M&A

The formal proposal of the current “the Belt and the Road” strategic concept has provided a new opportunity for Chinese enterprises to “go global” on objective conditions.The government and more and more enterprises have gradually realized the importance of going out.In recent years,the number and scale of cross-border mergers and acquisitions of Chinese enterprises have also been expanding,but the number and scale of mergers and acquisitions in different countries or regions have been quite different.Compared with the rapid development of cross-border mergers and acquisitions by Chinese enterprises,the domestic financial market has been unable to meet the funding needs of Chinese enterprises for their foreign investment activities.Therefore,in order to solve the financial problems of enterprises,it is necessary to seek funds in the host country market,which puts demands on the financial market of the host country.Based on the perspective of China's financial industry,this paper conducts an empirical study on whether the financial deepening factors of host countries will significantly affect the cross-border M&A activities of Chinese enterprises.The above research is aimed at the development of international business activities of Chinese enterprises,the location selection of cross-border M&As and the formulation of macroeconomic policies.There is a certain practical significance.Through the combing of relevant research at home and abroad,this paper finds that the existing research mainly focuses on the study of the financial market and financial deepening factors of the home country on the cross-border M&A of enterprises,and the research on the cross-border M&A of Chinese enterprises by the host country financial deepening is relatively scarce.Therefore,this paper takes the financial deepening factors of the host country as the core of research.After determining the core of this paper,through theoretical research,the index system for measuring the financial deepening of the host country is constructed from the aspects of financial market scale and financing level,and the empirical regression equation is constructed.This paper uses the panel data of overseas mergers and acquisitions of listed companies in China's financial industry from 2002 to 2017 as a sample,and establishes a multivariate linear regression model to conduct empirical tests to further explain the impact mechanism of the host country's financial deepening level on cross-border mergers and acquisitions of Chinese enterprises.The empirical results show that the countries with higher financial deepening have larger financial markets and more financing methods in the financial market.They can provide enterprises with better financing environment and more abundant financing funds.The investment environment is more conducive to the investment environment.Cross-border M&A activities of China's financial industry enterprises.In addition,other economic factors of the host country,such as economic development level,exchange rate level and degree of openness,also have a significant impact on the cross-border M&A activities of Chinese enterprises.Finally,this paper proposes that we should encourage and guide Chinese enterprises to expand financing channels and actively promote financing from the host country market.At the same time,the Chinese government should adopt active policies to provide guarantees for enterprises to finance and M&A activities in host countries,and promote China's financial industry enterprises overseas.