Governmental governance of host countries and cross-border merger and acquisition performance: Evidence from listed enterprises in China.
With globalization, the cases of Chinese enterprises' cross-border mergers and acquisitions (M&A) are increasing rapidly. The institutional environment of the host country has become an important factor influencing M&A performance, which has a profound impact on the success or failure o...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Public Library of Science (PLoS)
2021-01-01
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| Series: | PLoS ONE |
| Online Access: | https://doi.org/10.1371/journal.pone.0256494 |
| _version_ | 1819093925664653312 |
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| author | Kun Liu Shiyi Wu Na Guo |
| author_facet | Kun Liu Shiyi Wu Na Guo |
| author_sort | Kun Liu |
| collection | DOAJ |
| description | With globalization, the cases of Chinese enterprises' cross-border mergers and acquisitions (M&A) are increasing rapidly. The institutional environment of the host country has become an important factor influencing M&A performance, which has a profound impact on the success or failure of cross-border M&A. Based on this, for our study, we selected cases of cross-border M&A of listed companies in China from 2007 to 2018 as research samples to empirically test the impact of the host country's governance capacity on the cross-border M&A performance of acquirers. It was found that the host country's governance capacity has a negative effect on the M&A performance in the short term, but in the long term, it can effectively improve the cross-border M&A performance of acquirers. At the same time, specific to the relationship between the governmental governance capacity of six different dimensions and long-term M&A performance, the government effectiveness, regulation quality, and rule of law have the most significant promotional effect on long-term M&A performance. This implies that acquirers should focus on the long-term impact of governmental governance capacity on M&A, and consciously lean toward countries with strong governance capacity in order to obtain long-term value growth when arranging overseas M&A activities. The conclusion of this paper provides a reliable basis on which for companies to achieve sustainable growth in complex economic activities. |
| first_indexed | 2024-12-21T23:19:16Z |
| format | Article |
| id | doaj.art-1616c87c795c414f9fd31a8905bffc69 |
| institution | Directory Open Access Journal |
| issn | 1932-6203 |
| language | English |
| last_indexed | 2024-12-21T23:19:16Z |
| publishDate | 2021-01-01 |
| publisher | Public Library of Science (PLoS) |
| record_format | Article |
| series | PLoS ONE |
| spelling | doaj.art-1616c87c795c414f9fd31a8905bffc692022-12-21T18:46:50ZengPublic Library of Science (PLoS)PLoS ONE1932-62032021-01-01168e025649410.1371/journal.pone.0256494Governmental governance of host countries and cross-border merger and acquisition performance: Evidence from listed enterprises in China.Kun LiuShiyi WuNa GuoWith globalization, the cases of Chinese enterprises' cross-border mergers and acquisitions (M&A) are increasing rapidly. The institutional environment of the host country has become an important factor influencing M&A performance, which has a profound impact on the success or failure of cross-border M&A. Based on this, for our study, we selected cases of cross-border M&A of listed companies in China from 2007 to 2018 as research samples to empirically test the impact of the host country's governance capacity on the cross-border M&A performance of acquirers. It was found that the host country's governance capacity has a negative effect on the M&A performance in the short term, but in the long term, it can effectively improve the cross-border M&A performance of acquirers. At the same time, specific to the relationship between the governmental governance capacity of six different dimensions and long-term M&A performance, the government effectiveness, regulation quality, and rule of law have the most significant promotional effect on long-term M&A performance. This implies that acquirers should focus on the long-term impact of governmental governance capacity on M&A, and consciously lean toward countries with strong governance capacity in order to obtain long-term value growth when arranging overseas M&A activities. The conclusion of this paper provides a reliable basis on which for companies to achieve sustainable growth in complex economic activities.https://doi.org/10.1371/journal.pone.0256494 |
| spellingShingle | Kun Liu Shiyi Wu Na Guo Governmental governance of host countries and cross-border merger and acquisition performance: Evidence from listed enterprises in China. PLoS ONE |
| title | Governmental governance of host countries and cross-border merger and acquisition performance: Evidence from listed enterprises in China. |
| title_full | Governmental governance of host countries and cross-border merger and acquisition performance: Evidence from listed enterprises in China. |
| title_fullStr | Governmental governance of host countries and cross-border merger and acquisition performance: Evidence from listed enterprises in China. |
| title_full_unstemmed | Governmental governance of host countries and cross-border merger and acquisition performance: Evidence from listed enterprises in China. |
| title_short | Governmental governance of host countries and cross-border merger and acquisition performance: Evidence from listed enterprises in China. |
| title_sort | governmental governance of host countries and cross border merger and acquisition performance evidence from listed enterprises in china |
| url | https://doi.org/10.1371/journal.pone.0256494 |
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