Cross-Border Acquisitions in a Transition Economy: Recent Experiences of China and India
affiliation not provided to SSRN
This paper examines the causes and consequences of cross-border acquisitions in a transition economy using the 1998-2006 deal data for targeted Chinese and Indian firms and foreign acquirers. Our empirical analysis resulted in three important findings. First, firms with high cash reserve ratio are likely to be targeted in the recent cross-border acquisition trends in China and India; remarkably so when the cash-rich target has a high growth opportunity. Second, cross-border acquisitions bring higher shareholders’ values for foreign acquirers than for domestic acquirers. Third, these empirical results differ from existing literature where acquirer’s shareholder’s return is low in general.
Number of Pages in PDF File: 27
Keywords: Mergers and acquisition, Post merger performance
JEL Classification: O21, O25, G34
Date posted: September 28, 2010
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