Consequences of mergers and acquisitions on firm performance: a sector-level study of public listed companies in China / Char-Lee Lok …[et al.]

Lok, Char-Lee and Chen, Yadong and Phua, Lian Kee and Chan, Min Fong (2021) Consequences of mergers and acquisitions on firm performance: a sector-level study of public listed companies in China / Char-Lee Lok …[et al.]. Management & Accounting Review (MAR), 20 (1). pp. 113-138. ISSN (eISSN):2550-1895

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Official URL: https://mar.uitm.edu.my/

Abstract

As the motives of mergers and acquisitions (M&As) are different across industries, this study examined the synergy effects of technological gains and capital intensity on the operating performance of the acquiring firms after M&As. The sample comprised 434 completed M&As initiated by Chinese firms listed on the Shanghai and Shenzhen Stock Exchanges with 2,170 observations over the years 2012 to 2016. On average, the firms performed better after M&As. The results show that the operating performance of public health, information technology, telecommunication and financial service firms within the high-technology sector increased after M&As. This suggests that high-technology firms can benefit from M&As through a more extensive knowledge base and financial synergy. We also found that good governance characterized by board independence affects firm performance positively. Therefore, the acquisition of technology through M&As could be an essential corporate growth strategy in the Chinese capital market, which is transforming from a state-controlled economy to a more market driven one. The findings provide useful insights to both corporate players and policy-makers on the types of M&As that stand higher chances to generate positive outcomes and those that need extra measures and further scrutiny to prevent inefficient allocation of resources.

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Item Type: Article
Creators:
Creators
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Lok, Char-Lee
UNSPECIFIED
Chen, Yadong
UNSPECIFIED
Phua, Lian Kee
UNSPECIFIED
Chan, Min Fong
UNSPECIFIED
Subjects: H Social Sciences > HG Finance > Financial management. Business finance. Corporation finance
H Social Sciences > HG Finance > Balance sheets. Financial statements. Including corporation reports. Financial reporting. Financial disclosure
Divisions: Universiti Teknologi MARA, Shah Alam > Accounting Research Institute (ARI)
Journal or Publication Title: Management & Accounting Review (MAR)
UiTM Journal Collections: UiTM Journal > Management & Accounting Review (MAR)
ISSN: (eISSN):2550-1895
Volume: 20
Number: 1
Page Range: pp. 113-138
Official URL: https://mar.uitm.edu.my/
Item ID: 47757
Uncontrolled Keywords: M&As, China, Knowledge-based
URI: https://ir.uitm.edu.my/id/eprint/47757

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47757

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