Do corporate governance and culture matter in cross-border acquisitions? Some Chinese evidence

Won Young Chae, Jinho Byun, Paul Moon Sub Choi, Ruilin Yang

Research output: Contribution to journalArticlepeer-review

Abstract

The Chinese market for corporate control has recently gained much academic attention. This research constructs a sample of 159 cross-border acquisitions made by 123 Chinese firms between 2010 and 2014 and relates the roles of governance and culture to the wealth effects of mergers. First, the shareholders of Chinese bidders experience gains upon the announcement of overseas mergers. Second, country- and firm-level governance notably affects the cumulative abnormal returns of Chinese acquirers. Lastly, and however, the cultural distance per Hofstede’s (1980) four cultural dimensions does not appear to be a significant factor in determining the shareholder wealth of Chinese purchasers.

Original languageEnglish
Pages (from-to)90-105
Number of pages16
JournalInvestment Management and Financial Innovations
Volume15
Issue number1
DOIs
StatePublished - 1 Jan 2018

Keywords

  • Acquisitions
  • Corporate governance
  • Cultural factors
  • Cumulative abnormal returns
  • Mergers

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