The Wealth Effect Of Cross-Border Mergers And Acquisitions In The Chinese Financial Sector
The Wealth Effect of Cross-Border Mergers and Acquisitions in the Chinese Financial Sector
Abstract
This paper investigates the short-term wealth effects on foreign acquirers and Chinese targets involved in 37 cross-border mergers and acquisitions (M&As) in Chinese financial sector during the period 1990-2005. The intra-industry effects of significant cross-border M&As are then analyzed by examining the wealth effects on the rivals of Chinese target firms. The empirical results show that both experienced foreign bidders and Chinese targets obtain significant positive wealth gains during the event, while inexperienced foreign bidders suffer losses. This paper also demonstrates that foreign bidders with Chinese banking targets experience positive wealth gains, while they suffer losses with Chinese non-banking targets. Moreover, this paper shows that the wealth gains to foreign bidders are positively related to exchange rate volatility and to the size, business scope and......
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Approximate Word Count: 15225
Approximate Pages: 61 (250 words per double-spaced page)
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