Journal
CHINA ECONOMIC REVIEW
Volume 30, Issue -, Pages 169-179Publisher
ELSEVIER SCIENCE INC
DOI: 10.1016/j.chieco.2014.06.011
Keywords
Cross-border outbound M&As; China; Knowledge; Strategic assets; Expansion to new markets
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Funding
- Grants-in-Aid for Scientific Research [25101003] Funding Source: KAKEN
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Chinese cross-border outbound mergers and acquisitions (M&As) have been expanding rapidly since the mid-2000s with target firms in developed countries. The primary motives for such M&As are expansion into new markets and sourcing of knowledge and strategic assets. This study is the first attempt to examine the effects of Chinese outbound M&As on firm performance by applying propensity score matching estimations to a large set of firm-level data. We find that the sales, productivity, and tangible as well as intangible assets of the acquiring firms increase substantially after M&A transactions, which suggest that Chinese firms on average achieve their intended goals of outbound M&As. Further, outbound M&As do not increase research and development (R&D) intensity, implying complementarity, rather than overlapping, between R&D activities of the acquiring and acquired firms. (C) 2014 Elsevier Inc. All rights reserved.
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