Schweizer, Denis, Walker, Thomas and Zhang, Aoran (2017) Cross-border acquisitions by Chinese enterprises: The benefits and disadvantages of political connections. Journal of Corporate Finance . ISSN 09291199 (In Press)
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Official URL: http://dx.doi.org/10.1016/j.jcorpfin.2017.12.023
Abstract
This paper explores whether and how political connections affect the likelihood of completing a cross-border M&A deal for Chinese publicly listed, but privately-owned enterprises (POEs) and the resulting firm performance. In line with our proposed political connection trade-off theory, we find that POEs with politically connected top managers are more likely to complete a cross-border M&A deal than POEs with no such connections, but that this comes at the cost of negative announcement returns and subsequent lower accounting performance. These findings support the idea that politically connected top managers engage in “political empire building” behavior at the cost of shareholders' wealth.
Divisions: | Concordia University > John Molson School of Business > Finance |
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Item Type: | Article |
Refereed: | Yes |
Authors: | Schweizer, Denis and Walker, Thomas and Zhang, Aoran |
Journal or Publication: | Journal of Corporate Finance |
Date: | 16 December 2017 |
Digital Object Identifier (DOI): | 10.1016/j.jcorpfin.2017.12.023 |
Keywords: | China; Cross-border M&As; Emerging markets; Multinational enterprises; Political connections |
ID Code: | 983370 |
Deposited By: | Danielle Dennie |
Deposited On: | 04 Jan 2018 15:35 |
Last Modified: | 16 Dec 2018 01:00 |
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