| The implementation of the free trade zone strategy is an important part of China’s new round of opening-up.After China joined the World Trade Organization in 2001,the number of Free Trade Agreement(FTA)signed has increased rapidly.By 2021,China has signed 19 FTAs with 26 countries and regions.With the continuous upgrading of FTA negotiations,the coverage of its terms is also expanding,from trade in goods to trade in services,and then to finance,investment and other aspects,which can provide institutional guarantee for companies’foreign investment and cross-border operation.In this context,FTA has undoubtedly become an important factor to be considered in foreign investment and cross-border M&A.As one of the important ways of internationalization,cross-border mergers and acquisitions(M&A)can prompt companies to quickly acquire technologies and resources,enter overseas markets and gain a more favorable market position.In recent years,the cross-border M&A activities of Chinese companies have developed rapidly,but there are still institutional obstacles and high M&A risks in the implementation process.How to use FTA to promote Chinese companies to"go global" through cross-border M&A seems to be particularly important.In order to explore the above-mentioned issues,based on clarifying relevant theories and literature,this thesis uses the cross-border M&A data of Chinese A-share listed companies from 2002 to 2019,constructs a unique research sample combined with the dynamic changes of the potential target market of Chinese companies’ cross-border M&A,and empirically examines the impact of FTA signing on the decision-making and scale of cross-border M&A.Besides,this thesis explores whether the impact of FTA on cross-border M&A is heterogeneous due to the differences between company characteristics and contracting state characteristics.The results find that the signing of FTA can promote companies to conduct cross-border M&A activities and expand the scale of cross-border M&A in contracting states.Besides,the impact of FTA on cross-border M&A is closely related to company life cycle:in terms of M&A decision,FTA can significantly promote the cross-border M&A decision-making of companies in mature and recessionary stages,but has no obvious impact on growing companies;in terms of transaction scale,FTA improves the scale of cross-border M&A of mature companies in contracting states,but it has no significant effect on companies in growth and recessionary stages.The impact of FTA on cross-border M&A also vary according to company’s ownership property:from the perspective of M&A decision,FTA has played a positive role in promoting cross-border M&A activities of both state-owned companies and non-state-owned companies;in terms of transaction scale,FTA expands the scale of cross-border M&A of state-owned companies in contracting states,but has no significant impact on the scale of cross-border M&A of non-state-owned companies.The research further combined with the characteristics of contracting states shows that the signing of bilateral investment agreements will replace the role of FTA,which weakens the role of FTA in promoting the decision-making and scale of crossborder M&A;the Belt and Road initiative has enhanced the FTA’s role in promoting crossborder M&A,but has not significantly affected the relationship between FTA and the scale of cross-border M&A.Compared with the existing research,the innovation of this thesis is that the existing research on the impact of FTA on company foreign investment and M&A is mostly based on the national or industrial level macro data,which is difficult to distinguish the impact of company micro characteristics.This paper matches the cross-border M&A data of companies accurate to the host country with the financial data of listed companies and the host country data,and then explores the impact of FTA on company individual cross-border M&A behavior,which can more accurately and directly test the policy effect of FTA,and distinguish the heterogeneous effect brought by the financial characteristics of companies and the characteristics of contracting states.This not only further enriches the relevant theoretical research on the impact of FTA on micro company behavior,but also provides theoretical and empirical basis for Chinese companies to arrange cross-border investment layout rationally. |
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