Performance of Chinese Acquirers in the European Market
This study focuses on firms from the emerging market of China investing in the more developed market of Europe. The database consists of 51 merger deals between the five-year period of January 1st, 2012 and January 1st, 2017. The acquirers from this dataset are 44 Chinese firms listed on the stock exchange markets of Shenzhen, Shanghai and Hong Kong. This study contributes to the previous literature on the topic of M&A and stock performance due to the recent dataset and is an addition to the limited research on emerging markets (e.g. Gubbi et al 2010; Bhagat et al, 2011). This paper uses the famous event study methodology with the market model to calculate the normal and abnormal returns of the companies in question. A t-test with robust standard errors tests if the cumulative abnormal returns in the event period are significantly different. In the end the results of this quantitative analysis shows that the merger announcement do significantly affect the acquiring firms’ stock returns with better performances from companies from the mainland of China and companies operating in the manufacturing industry.
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