Journal
ASIA PACIFIC JOURNAL OF MANAGEMENT
Volume 27, Issue 3, Pages 523-539Publisher
SPRINGER
DOI: 10.1007/s10490-009-9150-7
Keywords
Cross-borders mergers and acquisitions; Principal-principal conflicts; Government ownership; Event-study methodology
Categories
Ask authors/readers for more resources
Chinese listed firms have gained the world's attention with several ambitious, high-profile cross-border mergers and acquisitions. In most of these deals, the Chinese government is the largest shareholder of the acquiring firms. As such, it may be the case that the Chinese government pushes through such deals even though they are not in the best interests of minority shareholders, giving rise to principal-principal conflicts. Along these lines, we hypothesize that increased government ownership in the acquiring firm will be associated with investors viewing a cross-border merger deal in less favorable terms. In addition, we hypothesize that environmental complexity will moderate this negative relationship. We test our hypotheses with a sample of cross-border mergers and acquisitions involving Chinese firms from 2000 to 2008. We find support for the main hypothesis, that is, that investors are indeed skeptical of cross-border mergers and acquisitions deals when the government is the majority owner (i.e., principal-principal conflicts). However, we find no support for the moderating effect. We discuss the implications of these findings for researchers and practitioners and suggest future research directions.
Authors
I am an author on this paper
Click your name to claim this paper and add it to your profile.
Reviews
Recommended
No Data Available