The influential factors for the performance of Chinese enterprises’ international takeovers

Abstract

In recent years, Chinese enterprises’ overseas mergers and acquisitions have become increasingly active. The method of overseas mergers and acquisitions can be regarded as a low-cost and good-effect way for the growth of Chinese enterprises, except their own accumulations. However, compared with the firms in western countries, Chinese enterprises’ overseas mergers and acquisitions can be affected by three factors: the ownership of acquiring enterprise, the types of target industries and the previous experience. In addition, Chinese and foreign scholars do not have a consistent conclusion for the enterprises’ performance, which is after their overseas mergers and acquisitions. Therefore, the study of the influential factors for Chinese enterprises’ overseas acquisitions is useful to the practice. This paper firstly analyzes the theoretical background of influential factors for the performance of overseas mergers. Then, this paper tests the three hypotheses of the influential factors. At last, this paper puts forward some effective suggestions.

Keywords:

• mergers and acquisitions
• CAPM mode
• government and regulatory issues

Public Interest Statement

Since ancient times, the Eastern and Western societies have been curious and explored for each other. The communication between the East and the West includes diplomacy, language, art, life style, science and education. Nowadays, influenced by global integration and other world economic organizations, frequent economic cooperation between East and West enterprises becomes an important form of social communication.

Overseas acquisition of enterprises is an active pursuit of internationalization for the East and the West, and also an important channel for enhancing understanding about each other.

This paper analyzes the performance of Chinese enterprises in overseas acquisitions, and finds that compared with Western enterprises, overseas acquisitions of Chinese enterprises are affected by three factors: ownership, target industry type, and past experience. This paper is conducive to better understanding of the problems existing in overseas acquisitions, and to promote international trade, market economy and the communication between the East and the West.

Additional information

Notes on contributors

Ping Xiang

Ping Xiang is a Doctor of Management Science and Engineering in the School of Economics and Management, Beijing University of Posts and Telecommunications, China. His primary research interests are in the mergers and strategic management.

Lu Qu

Lu Qu is working in Bank of China, China. Her primary research interests are in the financial economics and mergers.