The Influences Of Institutional Investors On Cross-border M&A Performances Of Chinese Firms

With the deepening of China’s "going abroad" policy,more and more Chinese enterprises actively carry out cross-border M&A activities,and gradually become a force that cannot be ignored in the global M&A market.This study focuses on the institutional investors,the important part of the capital market,can actively participate in the governance of listed companies by holding their shares and have an active impact on cross-border M&A activities of these Chinese enterprises.This thesis selects 346 successful cross-border M&A events of listed companies in China from 2009 to 2021 as research samples,and uses event research method and financial analysis method to empirically study the relationship between institutional investors and cross-border M&A performances of enterprises.The main research conclusion are as follows.In terms of short-term performances of cross-border M&A,the shareholding of qualified foreign institutional investors is significantly and negatively correlated with short-term performances.The heterogeneity of institutional investors is reflected in short-term performances.The shareholding of pressure sensitive institutional investors is significantly positively correlated with short-term performances,while the shareholding of pressure resistant institutional investors is significantly negatively correlated with short-term performances.The independence of pressure sensitive institutional investors is weaker.They are vulnerable to the influences of large shareholders and management of enterprises and will aggravates the volatility of shortterm stock prices.The pressure resistant institutional investors are more independent,which focus on the long-term rational investments,can play a role in stabilizing the short-term stock prices.In terms of long-term performances of cross-border M&A,the shareholding of institutional investors and the shareholding of qualified foreign institutional investors are significantly and positively related to long-term performances.The heterogeneity of institutional investors is reflected in long-term M&A performance.The shareholding of pressure sensitive institutional investors is significantly negatively correlated with longterm performances,while the shareholding of pressure resistant institutional investors is significantly positively correlated with long-term performances.Institutional investors,especially the pressure resistant institutional investors and qualified foreign institutional investors,can help enterprises achieve better long-term performance by actively participating in corporate governance.The mechanism tests found that institutional investors can improve the long-term performance by weakening the managerial overconfidence.Finally,according to the above research,this thesis makes following policy suggestions.Firstly,the authority concerned should encourage and guide institutional investors to participate in corporate governance for improving the enterprise management and protect the interests of small and medium-sized shareholders.Secondly,the supervision of capital market should be strengthened to effectively regulate the behaviors of various institutional investors,and crack down on the speculation of some institutional investors.Thirdly,the enterprises should enhance their abilities of international operation for improving the long-term performances of cross-border M&A,and achieve their long-term development through cross-border M&A.