Is China Crossing the Line?

Sammanfattning: Purpose To examine if Chinese acquirers create short-term shareholder wealth through cross-border acquisitions, measured by fluctuations of the stock price of the acquiring firm. Additionally, to investigate if industrial, institutional and cultural independent variables affect the cumulative abnormal returns. Methodology The study is quantitative with a deductive approach and based on the traditional event study methodology. Furthermore, cross-sectional regression models are used to analyze and determine the relationship between the cumulative abnormal return and the independent variables. Theoretical perspectives The theoretical frameworks used in this study are the Efficient Market Hypothesis, the Signaling Theory, the Theory of Competitive Advantages, The Resource based view, the Synergy Hypothesis, the OLI-Framework and the The CAGE Distance Framework. Empirical foundation The results are based on data of Chinese cross-border M&A deals between 2010-2018. The data is collected from the databases Zephyr, Datastream, Thomson Reuters Eikon and Bloomberg. Conclusion Chinese acquirers create short-term shareholder wealth through cross-border acquisition. When studying the independent variables, trading halts are significantly affecting the short-term generated wealth for shareholders. Manufacturing and cultural distance are the only variables that significantly explain the movement of short-term shareholder wealth. The variables market size, industry relatedness, relative deal size, nor institutional distance affect short-term shareholder wealth.