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The internationalization of Chinese companies: firm characteristics, industry effects and corporate governance
Full text linkA prominent issue in the internationalization of Chinese firms is that many are state-owned enterprises (SOEs) and that corporate governance in China is highly idiosyncratic. This paper identifies firm characteristics, industry effects and corporate governance mechanisms that foster internationalization. We find that Chinese cross-border mergers create shareholder value, but not more than domestic expansions. Corporate governance mechanisms matter, jointly and individually. While state-ownership predicts fewer cross-border mergers, a favourable board structure and corporate transparency explains higher M&A returns. As in more mature markets, firm- and industry-specific determinants also affect M&As in China
Endogenous mergers: Bidder momentum and market reaction
Full text linkRecent empirical studies on stock misvaluation as a possible determinant of mergers are inconclusive concerning the central hypothesis that over (under) valuation is negatively (positively) associated with merger announcement returns in stock mergers, but not in cash mergers. We provide empirical support for this hypothesis. In contrast to prior research, we employ a two-stage model to account for endogenous mergers and suggest an alternative specification of misvaluation based on an asset-pricing model (bidder momentum). In the first stage, we specify panel logit models to predict US mergers from 1981 to 2003 and find that bidder momentum triggers stock mergers, but not cash mergers. In the second stage, we regress cumulated abnormal returns on merger probabilities to control for the endogeneity of mergers. This reveals a lower market response for stock mergers compared to cash mergers, which we identify as market correction of misvalued acquirer
Sustainability in M&A: Empirical Findings on the Effect of ESG Scores on M&A Performance
No full textThis study investigates the short- and long-term impact of ESG scores on M&A performance across listed companies in the United States and Europe. Utilizing event study methodology and OLS regression analysis with various control variables, the research examines the influence of acquirer ESG, target ESG, and their interaction on cumulative abnormal returns surrounding deal announcements, post-merger return on assets, and bid premiums spanning from 2002 to 2024. It is hypothesized that higher ESG scores of both acquirers and targets, as well as their interaction, positively influence M&A performance and deal valuation. The results show no significant association between ESG and cumulative abnormal returns but reveal that higher ESG scores for both acquirers and targets are positively related to the bid premium, with a significant negative interaction effect. For the return on assets ratio, limited evidence suggests a positive link between the acquirer and target ESG. The findings contribute to a deeper understanding of how ESG characteristics influence M&A outcomes and have implications for corporate strategic decision-making, investor valuation, and academic research on sustainable finance
Putting oil and gas in CARs: the impact of climate policy events on stock performance
Full text linkThis thesis investigates how climate policy events impact the financial performance of the oil and gas industry in Western markets: the US, Canada, Europe, Australia and Japan. Using a multi-event study methodology approach using a CAR, BHAR and pooled OLS regressions analysis, the short- and medium-term impacts of several international, national and political events on the stock return performance of the oil and gas industry is examined. The findings report that international global climate policy commitments such as the Paris Agreement, COP26 and COP28 lead to sustained negative abnormal returns, especially in the US oil and gas industry. National policies show more diverse results, only the EU Fit for 55 Package induced a strong and consistent negative market response. The Inflation Reduction Act showed and the EU Green Deal showed more moderate effects, indicating that these events were already anticipated by investors. Political events also showed notable results; the Trump elections showed reasonable positive results in the shorter windows, although this effect was reversed in the longer windows. Conversely, Bidens’ elections showed a strong negative reaction in the oil and gas industry globally. Furthermore, the analysis demonstrates that in line with comparative institutional theory, firms located in regions with stronger and more credible institutional framework are more impacted by climate policy shocks than those without. Notably, higher ESG ratings correlated slightly with more with negative abnormal returns, challenging mainstream expectations. Finally, these results suggest that oil and gas stocks could act as partial hedges in times of broader market uncertainty. These findings contribute to the literature on climate finance by highlighting the varying market reactions to climate policy across different institutional environments and displaying the interplay between regulatory credibility, firm characteristics, and investor sentiment
The effect of Q on performance: Evidence from US M&A deals
No full textThis thesis investigates the influence of firm valuation, measured by Tobin's Q, on U.S. M&A performance. Contrary to traditional Q-theory, our findings reveal that high-Q acquirers consistently underperform in both short-term market reactions and long-term operating profitability. This could suggests high valuations may be linked to managerial overconfidence and capital misallocation, leading to value-destroying acquisitions.
Furthermore, mergers involving jointly high-Q firms or those within the same industry did not consistently yield superior outcomes. Notably, Q-value mismatches in same-industry mergers negatively impacted long-term performance. This thesis also find that large deal values in high-Q to low-Q transactions did not signal successful capital reallocation and were associated with poorer long-term results.
These findings underscore that managerial discipline and effective post-merger integration are crucial for M&A success rather than only firm valuation or industry overlap. This thesis cautions against uncritically interpreting high valuations or large deal sizes. Future research should explore nuanced measures and qualitative factors impacting M&A outcomes
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The Effects of Cross-border and Cross-industry Mergers and Acquisitions on Home-region and Global Multinational Enterprises
Full text linkContains fulltext :
112180.pdf (Publisher’s version ) (Open Access)17 juni 20137 p
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