Return to search

The Performance Effects of Cross-Industry Mergers and Acquisitions at Firms Listed in China’s Growth Enterprises Market

abstract: This study investigates the performance effects of cross-industry mergers and acquisitions (M&A) using a sample of firms listed in China’s Growth Entrepreses Market (GEM). Compared to firms listed in the Shanghai and Shenzhen Stock Exchanges, firms listed in the GEM are much smaller and tend to derive the majority of their revenues from a single industry. I first analyze the motives for firms listed in the GEM to engage in M&As and propose a set of factors that may influence their likelihood of M&A activities. Using data on 55 cross-industry M&As between January 1, 2012 and December 31, 2016, I find that investor generally responded positively in short-term, as indicated by the positive accumulated abonormal returns over the first five trading days following the announcements. Meanwhile, I found no evidence that investors benefited from cross-industry M&As in long-term over three years after the event. Further analysis suggests that the short-term effects of cross-industry M&As by GEM listed firms were influenced by the target firm’s market valuation, whether the M&A was paid by cash, the amount of the payment, and the degree of difference between the acquiring firm’s and the target firm’s industries. These findings have important implications for the investors and senior executives of firms listed in the GEM. / Dissertation/Thesis / Doctoral Dissertation Business Administration 2018

Identiferoai:union.ndltd.org:asu.edu/item:49118
Date January 2018
ContributorsZhou, Wei (Author), Shen, Wei (Advisor), Yu, Xiaoyun (Advisor), Jiang, Zhan (Committee member), Arizona State University (Publisher)
Source SetsArizona State University
LanguageEnglish
Detected LanguageEnglish
TypeDoctoral Dissertation
Format147 pages
Rightshttp://rightsstatements.org/vocab/InC/1.0/, All Rights Reserved

Page generated in 0.0018 seconds