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Private Benefits of Managerial Control, Government Ownership, and Acquirer Returns: Evidence from the Chinese State‐Controlled Listed Companies
Author(s) -
Li Shuangyan,
Feng Genfu,
Cao Guangjun
Publication year - 2012
Publication title -
canadian journal of administrative sciences / revue canadienne des sciences de l'administration
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.347
H-Index - 48
eISSN - 1936-4490
pISSN - 0825-0383
DOI - 10.1002/cjas.222
Subject(s) - business , control (management) , profitability index , government (linguistics) , sample (material) , scholarship , state ownership , accounting , state (computer science) , finance , monetary economics , economics , emerging markets , management , linguistics , philosophy , chemistry , chromatography , algorithm , computer science , economic growth
This article examines how government ownership affects the relationship between private benefits of managerial control, measured as excessive overhead expenses, and profitability of acquirers. A total of 246 merger and acquisition (M&A) events from Chinese state‐controlled listed companies (CSCLCs) between 2001 and 2006 constitutes the analytical sample. Under a low level of government shareholding, private benefits of managerial control positively correlated with acquirer announcement returns. However, there was no relationship between private benefits of managerial control and acquirer announcement returns under a high level of government shareholding. The implications of these findings for scholarship and practice are discussed. Copyright © 2011 ASAC. Published by John Wiley & Sons, Ltd.