Do cross-border mergers and acquisitions increase short-term market performance? The case of Chinese firms

Research output: Contribution to journalArticlepeer-review


Colleges, School and Institutes

External organisations

  • Loughborough University
  • Beijing Institute of Technology


Despite the new momentum in cross-border mergers and acquisitions (M&As) by emerging market firms, we have a limited understanding of the impact of these activities. Drawing on signalling theory and the institution-based view, this paper examines the extent of stock market reactions to the announcement of cross-border M&A deals, based on an event study of a sample of Chinese firms during the period 2000–2012. The findings indicate that the announcement of cross-border M&As results in a positive stock market reaction; this effect is more significant in the mainland Chinese stock markets (Shanghai and Shenzhen) than that in the Hong Kong market. The shareholders of Chinese firms that acquire a target firm in a host country with a low level of political risk gain higher cumulative abnormal returns than those firms targeting companies in countries with a high level of political risk. The shareholders of Chinese state-owned enterprises experience lower abnormal returns compared with those of Chinese privately owned firms when engaging in cross-border M&A deals.


Original languageEnglish
Pages (from-to)189-202
Number of pages14
JournalInternational Business Review
Issue number1
Early online date21 Jul 2016
Publication statusPublished - 1 Feb 2017


  • Chinese firms, cross-border mergers and acquisitions, stock market reactions, political risk, ownership