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CROSS‐BORDER M&As AND FIRM VALUE: A COMPARISON OF CHINA‐ AND US‐JAPAN M&As
Author(s) -
Chikamoto Keisuke,
Takeda Fumiko,
Yokoyama Ai
Publication year - 2016
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/coep.12129
Subject(s) - china , economics , stock (firearms) , monetary economics , value (mathematics) , stock price , biology , geography , paleontology , archaeology , machine learning , series (stratigraphy) , computer science
We examine the effect of M&As conducted by U.S. and Chinese bidders (US‐Japan and China‐Japan M&As) on the stock prices of Japanese targets. We find that both types of M&As tend to increase the stock prices of the Japanese targets and that market reactions are significantly greater for US‐Japan M&As than for China‐Japan M&As. Additionally, capital participation produces greater market reactions to China‐Japan M&As than other structures, while acquisition produces this effect in US‐Japan M&As. Our results are consistent with previous research indicating that market reactions increase for bidders operating in a developed country with high‐quality institutions and corporate governance. ( JEL G32, G34)