The effect of government involvement and payment method on merger and acquisition performance: the case of China

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dc.contributor.authorNnadi, Matthias
dc.contributor.authorVolokitina, Evgeniia
dc.contributor.authorAghanya, Daniel
dc.date.accessioned2020-02-28T11:55:33Z
dc.date.available2020-02-28T11:55:33Z
dc.date.issued2019
dc.description.abstractThis paper applies a sample of 842 to investigate the effect of government involvement and payment methods on merger and acquisition of Chinese listed firms for the period 1993 - 2015. The study employs market model as benchmark to estimate expected returns for several event windows. We find that Chinese acquirer shareholders experience higher returns from the acquisitions in firms with no government involvements than those where government is involved. Our study demonstrates that stock-financed acquisitions maximise the wealth gains of shareholders than cash-backed acquisitions. Our finding further shows that using cash to finance government backed acquisitions yields extra wealth for investors on the announcement date whilst the market experience higher abnormal returns when stocks are used to finance the acquisition of privately held targets. The result of this paper has significant policy implications for both M&A financing decisions and government involvements in merger deals.en_UK
dc.identifier.citationNnadi M, Volokitina, Aghanya D. (2020) The effect of government involvement and payment method on merger and acquisition performance: the case of China. International Journal of Banking, Accounting and Finance, Volume 11, Issue 3, pp. 385-410en_UK
dc.identifier.issn1755-3830
dc.identifier.uri
dc.identifier.urihttps://doi.org/10.1504/IJBAAF.2020.10028272
dc.identifier.urihttp://dspace.lib.cranfield.ac.uk/handle/1826/15198
dc.language.isoenen_UK
dc.publisherInderscienceen_UK
dc.rightsAttribution-NonCommercial-NoDerivatives 4.0 International*
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/4.0/*
dc.subjectMergersen_UK
dc.subjectAcquisitionen_UK
dc.subjectGovernmenten_UK
dc.subjectChineseen_UK
dc.titleThe effect of government involvement and payment method on merger and acquisition performance: the case of Chinaen_UK
dc.typeArticleen_UK

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