Nagano, Mamoru (2007): Cross-border Acquisitions in a Transition Economy: Recent Experiences of China and India.
Download (308kB) | Preview
This paper examines the causes and consequences of cross-border acquisitions in a transition economy using the 1998-2006 deal data for targeted Chinese and Indian firms and foreign acquirers. Our empirical analysis resulted in three important findings. First, firms with high cash reserve ratio are likely to be targeted in the recent cross-border acquisition trends in China and India; remarkably so when the cash-rich target has a high growth opportunity. Second, cross-border acquisitions bring higher shareholders’ values for foreign acquirers than for domestic acquirers. Third, these empirical results differ from existing literature where acquirer’s shareholder’s return is low in general.
|Item Type:||MPRA Paper|
|Original Title:||Cross-border Acquisitions in a Transition Economy: Recent Experiences of China and India|
|English Title:||Cross-border Acquisitions in a Transition Economy: Recent Experiences of China and India|
|Keywords:||Transition economy, Mergers and acquisition|
|Subjects:||G - Financial Economics > G3 - Corporate Finance and Governance > G34 - Mergers ; Acquisitions ; Restructuring ; Corporate Governance|
|Depositing User:||Mamoru Nagano|
|Date Deposited:||22 Aug 2010 23:44|
|Last Modified:||20 Aug 2016 02:51|
Agrawal, A., J. F. Jaffe, and G. N. Mandelker (1992), “The post-merger performance of acquiring firms: A re-examination of an anomaly,” Journal of Finance 47 (4), pp.1605-1621.
Andrade, G. and E. Stafford (1999) , “Investigating the economic role of mergers,” Harvard University working paper.
Andrade, G., M. Mitchell, and E. Stafford (2001) , “New evidence and perspectives on mergers,” Journal of Economic Perspectives 15(2), pp.103-120.
Berger, P. G. and E. Ofek (1995), “Diversification’s effect on firm value,” Journal of Financial Economics 37 (1), pp.39-65.
Bhagat, S., M. Dong, D. Hirshleifer, and R. Noah (2005), “Do tender offers create value? New methods and evidence,” Journal of Financial Economics 76 (1), pp.61-98.
Bradley, M., A. Desai, and E. H. Kim (1988) , “Synergistic gain from corporate acquisitions and their division between the stockholders of target and acquiring firms,” Journal of Financial Economics 21(1) , pp.61-98.
Brown, S. J. and J. B. Warner, (1985), “Using daily stock returns: the case of event studies,” Journal of Financial Economics 14, pp. 3-31.
Chari, A., P. P. Ouimet, and L. L. Tesar (2008), “The Value of Control in Emerging Markets,” University of North Carolina working paper, available at http://www.unc.edu/~achari/control.pdf
Chang, S. (1998), “Takeovers of privately held targets, methods of payment, and bidder returns,” Journal of Finance 53, pp.773-784.
Dong, M., D. Hirshleifer, S. Richardson and S. H. Teoh (2002), “Does investor misevaluation drive the takeover market?” Unpublished working paper, The Ohio State University, Columbus, OH.
Fama, E., and K. French (1997), “Industry costs of equity,” Journal of Financial Economics 43, pp.153-193.
Fuller, K., J. Netter, and M. Stegemoller (2002) , “What do returns to acquiring firms tell us? Evidence from firms that make many acquisitions, The Journal of Finance VOL LVII, No.4, pp.1763-1793.
Hansen, R. G. and J. Lott, (1996), “Externalities and corporate objectives in a world with diversified shareholders/consumers,” Journal of Financial and Quantitative Analysis 31, pp.43-68.
Hanson, R., (1992), “Tender offers and free cash flow: An empirical analysis,” Financial Review 27, pp.185-209.
Harford, J., (1999) , “Corporate Cash Reserves and Acquisitions,” The Journal of Finance, JOL. LIV, NO6. December 1999. pp.1969-1997.
Harford, J. (2005), “What drives merger waves?” Journal of Financial Economics 77 (3), pp.529-560.
Hasbrouch, J. (1985), “The characteristic of takeover targets. Q and other measures,” Journal of Banking and Finance 9 (3), pp.351-362.
Jensen, M. C., (1986), “Agency costs of free cash flow, corporate finance, and takeovers,” American Economic Review 76 (2), pp.323-329.
Jensen, M. C., (1988), “Takeovers; Their causes and consequences,” Journal of Economic Perspective 2 (1), pp.21-48.
Lang, L. H. P., R.M. Stulz, and R. Walking (1989) , “Managerial performance, Tobin’s Q and the gains from successful tender offers,” Journal of Financial Economics 24(1) , pp.137-154.
Malmendier, U. and G.A. Tate, (2002), “Who makes acquisitions?” CEO overconfidence and the market’s reaction,” Unpublished working paper, Harvard Business School, Cambridge, MA.
Mikkelson, W. and M. M. Partch, (1989), “Managers’ voting rights and corporate control,” Journal of Financial Economics 25, pp.263-290.
Moeller, S.B., F.P. Shlingemann, and R.M. Stulz (2004) , “Firm size and the gains from acquisitions,“ Journal of Financial Economics 73, pp.201-228.
Mitchell, M. L. and J. H. Mulherin (1996), “The impact of industry shocks on takeover and restructuring activity,” Journal of Financial Economics 41(2), pp. 193-229.
Morck, R., A. Shreifer, and R. W. Vishny (1988), “Alternative mechanism for corporate control,” NBER Working Paper Series No. 2532, National Breau of Economic Research.
Morck, R., A. Shreifer, and R. W. Vishny (1990), “Do managerial motives drive bad acquisitions?” Journal of Finance 45 (1), pp.31-48.
Palepu, K. G. (1986), “Predicting takeover targets: A methodological and empirical analysis,” Journal of Accounting and Economics 8 (1), pp.3-35.
Rau, P. R. and T. Vermaelen (1998), “Glamour, value and the post-acquisition performance of acquiring firms,“ Journal of Financial Economics 49 (2), pp. 223-253.
Servaes, H. (1991), “Tobin’s Q and the gain from takeovers,” Journal of Finance 46 (1), pp.409-419.
Shleifer, A. and R. W. Vishny (1986), “Large shareholders and corporate control,” Journal of Political Economy 95 (June), pp.461-488.
Shleifer, A. and R. W. Vishny (1988), “A survey of corporate governance,” Journal of Finance 52 (2), pp.737-783.
Shleifer, A. and R. W. Vishny (2003), “Stock market driven acquisitions,” Journal of Financial Economics 70 (3), pp.295-311.
Sirower, M. L., (1997), The Synergy Trap: How Companies Lose the Acquisition Game, Free Press.
Smith, R. and J. H. Kim, (1994) “The combined effects of fee cash flow and financial slack on bidder and target stock returns,” Journal of Business 67, pp.281-310.
Song, M. and R. Walking, (1993), “The impact of managerial ownership on acquisition attempts and target shareholder wealth,” Journal of Financial and Quantitative Analysis 28, pp.439-457.
Available Versions of this Item
- Cross-border Acquisitions in a Transition Economy: Recent Experiences of China and India. (deposited 22 Aug 2010 23:44) [Currently Displayed]