Uncertainty and China's cross-border mergers and acquisitions. Issue 3 (26th July 2022)

• Record Type: Journal Article
• Authors: Sun, Yanming; Duan, Shuhan; Wang, Lili; Yang, Caili
• Is Part Of: Journal of the Asia Pacific economy. Volume 27:Issue 3(2022)
• Page Start: 515
• Page End: 533
• Publication Date: 2022-07-26
• Subjects: Uncertainty -- economic and political uncertainty -- cross-border mergers and acquisitions -- China; Asia -- Economic conditions -- 1945- -- Periodicals; Pacific Area -- Economic conditions -- Periodicals; Asia -- Economic integration -- Periodicals; Pacific Area -- Economic integration -- Periodicals; 330.95
• DOI: 10.1080/13547860.2022.2088511
• Languages: English
• ISSNs: 1354-7860

Abstract

Abstract: This study examines the relationship between uncertainty and China's cross-border mergers and acquisitions (M&As). Based on 1847 cross-border M&A deals made by Chinese firms in 130 countries and regions over the period of 2002 − 2018, we find that Chinese acquirers are less likely to conduct cross-border M&A deals when uncertainty is high in the target country. The results are robust to alternative samples and measures of uncertainty. Furthermore, we find that uncertainty has a dynamic impact on China's cross-border M&As. Variations in the economic environment close to the time of an announcement have a greater influence on affecting the final occurrence of M&A transactions than those in a more distant period. Lastly, market conditions are important in shaping the effects of uncertainty on M&As. The negative effects of uncertainty are larger in countries with weaker financial markets and government regulation and lower levels of openness.