Gains to Chinese Bidder Firms: Domestic vs. Foreign Acquisitions

Emma Black, Angelos Doukas, Xiaofei Xing, Jie Guo

Research output: Contribution to journalArticlepeer-review

5 Citations (Scopus)
312 Downloads (Pure)


This paper examines whether foreign acquisition of Chinese firms improves share price performance relative to domestic acquisitions. The results show that foreign acquisitions are not associated with positive abnormal returns in the short-run, but that they are so associated for domestic acquisitions. Foreign acquisitions also realise significant long-run gains, especially when the acquiring firm is large. Specifically, we find that there is a significant, positive long-run outperformance of 29.81% for large foreign acquisitions benchmarked against domestic ones, while large foreign acquisitions earn 22.39% in aggregate. Our evidence suggests that large Chinese acquirers gain when they expand their operations abroad, consistent with the literature on reverse internalisation.
Original languageEnglish
Pages (from-to)905-935
JournalEuropean Financial Management
Issue number5
Early online date30 Sept 2013
Publication statusPublished - 30 Nov 2015


  • merger and acquisitions
  • China
  • financial performance
  • scarcity
  • cross-border
  • foreign direct investment
  • multinational
  • diversification


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