Abstract
This study examines the relationship between uncertainty and China’s cross-border mergers and acquisitions (M&As). Based on 1847 cross-border M&A deals made by Chinese firms in 130 countries and regions over the period of 2002 − 2018, we find that Chinese acquirers are less likely to conduct cross-border M&A deals when uncertainty is high in the target country. The results are robust to alternative samples and measures of uncertainty. Furthermore, we find that uncertainty has a dynamic impact on China’s cross-border M&As. Variations in the economic environment close to the time of an announcement have a greater influence on affecting the final occurrence of M&A transactions than those in a more distant period. Lastly, market conditions are important in shaping the effects of uncertainty on M&As. The negative effects of uncertainty are larger in countries with weaker financial markets and government regulation and lower levels of openness.
Acknowledgments
We would like to thank anonymous reviewers for their comments.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1 Given the smaller standard deviation of the dependent variable, we enlarge the coefficients of all variables by 1000 times in all regressions.
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Notes on contributors
Yanming Sun
Yanming Sun is an associate professor of the Institute for Global Innovation and Development, School of Urban and Regional Science, Institute of Eco-Chongming in East China Normal University. She has got a Ph.D. in economics from Oklahoma State University and another Ph.D. in national economics from Renmin University of China. Her research interests include resource and environmental economics, green innovation and sustainable development, mathematical economics. She serves as society members of Western Economic Association International (WEAI), Association of Environmental and Resource Economists (AERE), Southern Economic Association (SEA). She has published articles in several academic journals including International Journal of Environmental Research and Public Health, Economic Modelling, The Social Science Journal and so on. She is also reviewers for Energy Policy, Environmental and Resource Economics, Journal of Cleaner Production, Economic Modelling, Geographical Research (Chinese), Resources Science (Chinese), and so on.
Shuhan Duan
Shuhan Duan is currently a graduate student of School of Urban and Regional Science in the East China Normal University, who has got a bachelor’s degree in international economics and trade. His research interests include economic geography, regional innovation and development.
Lili Wang
Lili Wang is an associate professor of the Institute of International Economy in the University of International Business and Economics. She has got a Ph.D. in economics from Shandong University. Her research fields are international trade, foreign direct investment and environmental economics. She has publications in journals including Emerging Markets Finance and Trade, China and World Economy, Energy Policy, and so on.
Caili Yang
Caili Yang is currently a Ph.D. student of School of Applied Economics in the Renmin University of China, who is majoring in urban and regional economic development and growth.