International investors' reactions to cross-border acquisitions by emerging market multinationals

Lutao Ning*, Jing-Ming Kuo, Roger Strange, Boya Wang

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

30 Citations (Scopus)
336 Downloads (Pure)


How do international investors react to announcements of cross-border mergers and acquisitions (CM&As) by emerging market multinational enterprises (EMNEs)? Using a unique and manually-constructed firm-level dataset, this paper examines the stock price reactions to CM&A announcements made over the period 1991-2010 by Chinese MNEs listed on the Hong Kong Stock Exchange and the wealth impacts of their corporate governance. Our empirical findings confirm a positive stock price reaction on average, and suggest that international investors react positively to the presence of large shareholders, but negatively to the presence of institutional shareholders. There is a negative impact if the largest shareholder is either the State or the corporate founder. We suggest that this is because the international investors perceive potential principal-principal conflicts in such ownership/control constellations and discount equity prices accordingly. We also find that Board size and independence have positive effects on the price reaction, but that large supervisory boards engender negative reactions.

Original languageEnglish
Pages (from-to)811-823
Number of pages13
JournalInternational Business Review
Issue number4
Early online date25 Jan 2014
Publication statusPublished - Aug 2014


  • China
  • Corporate governance
  • Cross-border mergers and acquisitions
  • Emerging economies
  • FDI
  • Multinational enterprises

ASJC Scopus subject areas

  • Business and International Management
  • Marketing
  • Finance


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