Religion and Cross-Border Mergers and Acquisitions

Frederick Dongchuhl Oh,Donglim Shin 한국재무학회 2018 한국재무학회 학술대회 Vol.2018 No.05

This study examines the effect of religion on cross-border mergers and acquisitions (M&As). We measure the religious distance between countries and find that cross-border M&A activity is lower for country pairs with greater religious distance. This finding remains intact after a host of variables affecting M&A activity are controlled for and when instrumental variables are used for religious distance. Moreover, the negative effect of religious distance on cross-border M&A activity is more pronounced if the people living in either the acquirer or target country are more religious. Overall, our results suggest that differences in religious beliefs impose an additional coordination cost on merging firms and thereby inhibit cross-border M&A activity. (JEL G34, Z12)

Can Chinese Target Firms Raise Value through Cross-border M&As? The Role of Cross-border Mergers and Acquisitions in China

Ahn, Ok hwa,Yang, Yuchuan 한국재무학회 2007 한국재무학회 학술대회 Vol.2007 No.05

We provide empirical evidence on how cross-border acquisitions from the perspective of an foreigner acquirer differ from domestic transactions, based on stock and operating performance measures. We analyze the shareholder wealth effects of 663 domestic and international acquisitions announced by Chinese corporations between 1993 and 2006. We find some difference between national and cross-border mergers. We find that foreign acquirers experience significantly higher stock and operating performance than for domestic transactions. Higher target gains for cross-border transactions are consistent with the acquirer's ability to correctly value or capture synergies in cross-border takeovers. We also analyze the role of corporate governance in cross- border acquisitions. Consistent with our hypothesis, we find that for cross-border acquisitions, the abnormal returns to the target firm stockholders are increasing in the ownership of the state and entrepreneur. However, we find that takeover premiums are decreasing in the domestic acquirer’s with the increasing of the state owned shares. This result suggests that foreign acquirers have to compensate target firm shareholders for exposing them to worse corporate governance regimes. These results suggest that corporate governance practices have valuation effects. We also examine the sources of wealth gains in Chinese targets of foreign acquirers. We find that exchange and taxes are important in justifying the target premium in foreign takeovers than in domestic takeovers. Taken together, our results suggest that the realization of synergy is the main motive behind foreign takeovers. A probit analysis suggests that takeovers of foreign firms less likely to make deals in which shareholders have positive change in ROE. How ever, interestingly, the dummy for B Shares or H shares is positively related with domestic takeover premium, indicate that the financial transparency and adequate information disclosure are crucial in transition economies.

인수합병형 외국인직접투자 결정요인 분석: 한국의 경험과 무역비용의 영향

윤미경 ( Mikyung Yun ) 한국질서경제학회 2012 질서경제저널 Vol.15 No.3

This paper explores the relationship between trade cost and cross border mergers in Korea during the post-crisis period of 2000~2010. In particular, attempt was made to verify if there is differential impact of trade cost depending on the type of cross border mergers and to test for the comparative advantage theory of cross border mergers. Findings show that trade cost is negatively correlated with cross border mergers in general, but positively correlated for horizontal mergers. At the same time, comparative advantage of source countries as measured by the Balassa Index, was shown to be positively correlated only in the case of horizontal M&As. This result reflects the fact that most cross border mergers undertaken in Korea are non-horizontal in nature. The implication is that the negative correlation between trade cost and cross border mergers comes from the non-horizontal nature of most of the CBMAs in Korea rather than due to cross border mergers being used as instruments of comparative advantage by acquiring firms.

Can Chinese Target Firms Raise Value through Cross-border M&As? The Role of Cross-border Mergers and Acquisitions in China

Ok Hwa Ahn,Yu Chuan Yang 한국경영학회 2007 한국경영학회 통합학술발표논문집 Vol.2007 No.8

We provide empirical evidence on how cross-border acquisitions from the perspective of an foreigner acquirer differ from domestic transactions, based on stock and operating performance measures. We analyze the shareholder wealth effects of 663 domestic and international acquisitions announced by Chinese corporations between 1993 and 2006. We find some difference between national and cross-border mergers. We find that foreign acquirers experience significantly higher stock and operating performance than for domestic transactions. Higher target gains for cross-border transactions are consistent with the acquirer`s ability to correctly value or capture synergies in cross-border takeovers. We also analyze the role of corporate governance in cross-border acquisitions. Consistent with our hypothesis, we find that for cross-border acquisitions, the abnormal returns to the target firm stockholders are increasing in the ownership of the state and entrepreneur. However, we find that takeover premiums are decreasing in the domestic acquirer`s with the increasing of the state owned shares. This result suggests that foreign acquirers have to compensate target firm shareholders for exposing them to worse corporate governance regimes. These results suggest that corporate governance practices have valuation effects. We also examine the sources of wealth gains in Chinese targets of foreign acquirers. We find that exchange and taxes are important in justifying the target premium in foreign takeovers than in domestic takeovers. Taken together, our results suggest that the realization of synergy is the main motive behind foreign takeovers. A probit analysis suggests that takeovers of foreign firms less likely to make deals in which shareholders have positive change in ROE. How ever, interestingly, the dummy for B Shares or H shares is positively related with domestic takeover premium, indicate that the financial transparency and adequate information disclosure are crucial in transition economies.

중국기업의 국제 M&A 거래 완료 결정요인에 관한 연구: 정치적 연결을 중심으로

고제경,조영곤 한국국제경영학회 2020 國際經營硏究 Vol.31 No.3

This study empirically analyses the relationship between political connections of Chinese listed companies and the likelihood of cross-border M&A deals. In China, where government influence is strong, political connections are an important source for achieving competitive advantage. We believe that the political connections of the Chinese firms will increase the likelihood of deal completion in cross-border M&As since the companies could benefit from information related to acquisitions, funding for acquisitions, and flexible application of regulations through the connections. However, this effect of political connections of Chinese firms on the likelihood of the deal completion will be weakened in state-owned firms rather than private-owned ones due to the legitimacy pressure from the host countries to the acquirer. Considering that state-owned firms are often perceived as agents of the government, which could receive greater pressure on their legitimacy than private-owned firms, we argue that the state-owned firms will negatively moderate the positive influence of political connections on the likelihood of M&A deal completion. Using a sample of 439 cross-border acquisition deals conducted by 353 Chinese listed firms, we find that political connections increase the likelihood of deal completion. We also find that state-owned firms negatively moderate this relationship. The results provide evidence to support our arguments. This study contributes to our understandings by empirically showing that the political connections of Chinese firms, which are relatively unexamined in the international M&A literature, could serve as an antecedent for the completion of cross-border M&A deals. Theoretical and managerial implications are discussed. 본 연구는 중국 상장기업의 정치적 연결과 국제 인수합병(Cross-border M&A) 거래 완료 가능성 사이의 관계를 실증분석한다. 정부의 영향력이 강한 중국에서는 기업이 보유한 중국 정부와의 정치적 연결이 중요한 경쟁우위의 원천이 된다. 기업은 정치적 연결을 통해 인수 관련 투자 정보의 습득, 인수자금 지원, 그리고 규제의 탄력적 적용 등의 혜택을 얻을 수 있으므로 기업의 정치적 연결은 국제 M&A에 있어서 거래가 완료될 가능성을 높여줄 것이라 판단한다. 그러나 이러한 중국기업의 정치적 연결이 국제 M&A 거래 완료 가능성에 미치는 영향은 기업의 소유구조에 따라 다르게 나타날 수 있다. 정부의 영향력이 강한 국유기업은 정부의 대리인으로 인식되어 민영기업에 비해 현지국의 정당성 압력을 더 크게 받을 수 있기 때문이다. 이에 본 연구는 국유기업은 정치적 연결이 국제 M&A 거래 완료 가능성에 미치는 영향력을 약화시킬 것으로 보았다. 2006년부터 2017년 기간 동안 이루어진 353개 중국 상장기업의 국제 M&A 439건을 표본으로 실증분석을 실시한 결과, 기업의 정치적 연결은 국제 M&A 거래 완료 가능성과 유의한 정(+)의 관계를 갖는 것으로 나타났다. 또한 기업의 정치적 연결이 국제 M&A 거래 완료 가능성에 미치는 정(+)의 관계는 민영기업에 비해 국유기업에서 약화되는 것으로 나타났다. 본 연구는 국제 M&A 연구에서 상대적으로 많이 다루어지지 않았던 인수기업의 정치적 연결이 국제 M&A 거래 완료의 선행요인으로 작용할 수 있음을 실증분석을 통해 확인하였다.

Impact of Economic Determinants on the Scale Effect of Cross Border Merger and Acquisition: A Comparison between Developed and Emerging Economies

Farah NAZ,Abdul Qayyum KHAN,Muhammad Yar KHAN 한국유통과학회 2022 The Journal of Asian Finance, Economics and Busine Vol.9 No.5

The main reason for the increase in cross-border mergers and acquisitions in developed and emerging countries is globalization and growing economic interdependence across countries. The state of the economy has a significant impact on whether cross-border mergers and acquisitions are encouraged or discouraged by international strategic capital market changes. This study empirically evaluates the influence of determinants of economic development on the scale effect of Cross Border M&As separately on emerging and developed nations as a research gap. We first separated the small and large scale firms based on companies’ worth and used panel regression to analyze the impact of GDP, employment rate, and market capitalization on cross-border merger & acquisition deals over the period of 2008-2018. Results indicate that GDP and market capitalization have a positive effect on CBM&A, whereas employment rate has a negative effect on CBM&A deals in large-scale firms of both emerging and developed countries. This study results offer the implication for the potential investors and policymakers to strategically analyze the implementation of cross-border mergers & acquisitions.

중국기업의 국제인수합병이 기업성과에 미치는 영향요인 분석: 자원기반시각을 중심으로

김원령,박영렬 한국국제경영관리학회 2019 국제경영리뷰 Vol.23 No.1

Due to the continuing growth of Chinese firms and the change of the global market ,many Chinese firms are exploring overseas markets. China is a developing country which has a short history of merger and acquisition and insufficient experience, therefore the recent explosion of mergers and acquisitions has depended on its abundant foreign reserve and financial capability. The fundamental causes of this phenomenon include the Chinese government raised the banner of "Go global" and actively supported overseas investments by Chinese firms, and predicted that in order to secure resources, technology, market and professional skills, it is necessary to promote mergers and acquisitions. Therefore, this article attempts to analyze the influence factors on the performance of Chinese enterprises after merger and acquisition. After the simple understanding on the timing and motivation of Chinese firms’ mergers and acquisitions, through the resource- based theory. This article theoretically explains the influence factor of merger and acquisition and tests and analyzes this idea according to the statistical data of Zephyr database from 2008 to 2014. Taking 532 listed companies which have already been acquired in international market as the research object. The result shows that the industry relevance between acquiring and acquired enterprises, the past experiences of merger and acquisition, and the government financial support factors have a positive effect. On the other side, the cultural difference between acquiring and acquired firm has a negative impact on the achievement level of international mergers and acquisitions. In addition, this article confirms that Chinese firms which have a high dependency on government supports, by adding the variables of government financial support, by considering adjustment effect of national development level, and by complementing existing relationships. 중국기업의 지속적인 성장과 글로벌 시장의 변화로 많은 중국 기업들은 해외 시장 진출을 모색하고 있으며, 인수합병방식을 통해 해외시장에 적극 진출하고 있다. 중국은 신흥국가로 인수합병 역사가 짧고 경험이 부족하지만 그들의 인수합병은 중국의 최근 활발한 해외직접투자와 정부의 재정적 지원에 의존하고 있다. 중국정부는 “저우추취 (走出去)”기치아래 중국기업의 해외투자를 적극 지원하고 있으며 중국기업은 자원, 기술, 시장, 역량을 인수합병을 통해 획득 하고 있다. 본 연구에서는 중국기업의 인수합병 성과에 미치는 요인을 분석하고자 먼저 중국의 인수합병 시기와 동기에 대해 살펴본 후 2008년부터 2014년까지 국제인수합병을 시행한 중국 상장기업 532개를 대상으로 국제 인수합병 성과에 영향을 미치는 요인을 자원기반시각(resource-based view of firm)을 활용하여 실증 분석하였다. 연구결과에 의하면 인수-피인수기업간의 산업연관성, 과거 국제인수합병경험 및 정부 재정지원은 국제인수합병 성과에 긍정적인 영향을 미치는 것으로 나타났고 인수기업과 피인수기업의 문화적 거리는 국제인수합병 성과에 부정적인 영향을 미치는 것으로 나타났다. 본 연구의 시사점으로 중국기업은 중국 정부의 재정적지원에 강하게 의존하며 이는 국가발전수준이 높을수록 정부 재정지원과 인수합병 성과간의 관계는 더 긍정적으로 조절되는 것으로 나타났다.

중국 기업의 해외 인수합병에 대한 위험 감소방안에 관한 고찰

김광록,고봉정 한국상사법학회 2021 商事法硏究 Vol.40 No.2

With the development of globalization, enterprisesʼ overseas mergers and acquisitions have become an important way to invest abroad and expand overseas business. Chinese enterprisesʼ overseas M&A activities have developed rapidly, and the regions and industries involved in mergers and acquisitions have become more and more extensive, which has a significant impact and significance on the development of enterprises. However, due to the immature laws and systems related to Chinese enterprisesʼ overseas mergers and acquisitions, and the lack of in-depth research on legal and social issues and other reasons in other countries, there are great risks and challenges in overseas mergers and acquisitions of Chinese enterprises. Among them, the legal risks in mergers and acquisitions are particularly prominent, such as anti-monopoly, anti-mergers, labor protection, taxation, environmental protection, intellectual property rights and other aspects’ legal risks occur from time to time in overseas mergers and acquisitions. Combined with the relevant cases of Chinese enterprisesʼ overseas M&A, this article analyzes the current situation of Chinese enterprises’ overseas M&A and the legal risks and causes of mergers and acquisitions, and proposes measures to prevent the legal risks of Chinese enterprises' overseas M&A, in order to reduce the legal risks of Chinese enterprises' overseas M&A. 전 세계적으로 인수합병 시장이 점점 더 커지고 있는 사정에서 이미 중국의 역외 인수합병은 미국을 넘어 역대 최고치를 경신한 바 있다. 다만 2016년 중국 정부가 비이성적인 대외투자를 제한한다고 발표한 이후 중국의 역외 인수합병 추세는 다소 감소세를 보였지만 여전히 역외 인수합병은 활발하게 이루어지고 있는 사정이다. 사실상 역외 인수합병은 해외로 진출하고자 하는 기업으로서는 새로운 시장에 대한 위험과 비용을 감소하는 이점으로 인하여 해외 투자와 해외 사업 확장의 중요한 방식이 되었다. 특히 중국 기업의 역외 인수합병은 매우 빠르게 발전하면서 인수합병과 관련한 지역은 물론 관련 산업은 그 범위가 점점 더 커지면서 중국기업 발전에 큰 영향을 끼치고 있는 사정이다. 그러나 중국 기업의 역외 인수합병과 관련한 법제가 아직까지는 크게 성숙하지 못한 단계에 머무르고 있다. 더군다나 역외 인수합병을 시도하고자 하는 중국 기업이 해당하는 역외 국가의 법률 및 사회 문화에 대하여 충분한 이해 및 연구가 부족한 사정이므로 중국 기업의 역외 인수합병에 잠재하는 위험과 도전이 상당하다. 특히 인수합병 관련 법적 리스크는 매우 크게 나타나는데, 예를 들어 반독점, 반합병, 노동문제, 세금, 환경문제, 지적 재산권 등 각 분야의 법적 리스크는 최근 이슈가 되고 있는 ESG경영과 관련하여 수시로 발생하고 있는 실정이다. 따라서 이 글에서는 중국 기업의 역외 인수합병 사례를 통하여 그 현황과 법적 리스크 및 원인을 분석하고자 하였다. 이를 통하여 이 글은 중국 기업의 역외 인수합병에 따른 법적 리스크를 감소하는 방안을 제시하고자 하였다.

The Impact of Cultural Differences on Financial Quality in Cross-border Mergers and Acquisitions: A Case Study of SAIC Motor and Ssangyong Motor

Jin, Zheng,Ren, Yanyan,Li, Guangyuan 한중경제문화학회 2016 한중경제문화연구 Vol.6 No.-

This study discusses several issues which are very important in worldwide mergers and acquisitions, such as cultural differences, culture clashes, operating results and financial quality. A case of SAIC Motor's acquisition of Ssangyong Motor is examined. For this study, 20 financial ratios are used to calculate the financial quality of SAIC in the post-acquisition integration. The result shows that cultural differences possibly have a negative effect on post-acquisition integration and cultural clashes are the root cause of the financial quality plummet. The suggestions are also provided that top managers should pay much more attention to the negative effects of cultural clashes and strengthen cultural integration.

Mergers and Acquisitions in Hawai`i: Potential Obstacles for Asia-based Investors

( Adrian Catalan ) 고려대학교 법학연구원 2016 The Asian Business Lawyer Vol.17 No.-

This Article provides a holistic analysis of Hawai``i’s legal, institutional, and financial preparedness for international investment in the form of Mergers and Acquisitions (“M&As”). M&As are the investment vehicle of choice in Asia and present a complex and significant opportunity for the U.S., as Asian investors look further at North America for strategic alliances and global trade. Using Hawai’i as a case study to analyze the feasibility of M&A investment in the U.S., the Article proposes the development of a central state foreign investor agency to navigate local legislation, economic environment, and infrastructure. The Article drives new legal examination of M&As through a uniqueness of argument and interdisciplinary approach in outlining a broad framework for assessing a state’s international investment readiness. As a gateway to the U.S., Hawai``i serves as an effective lens in analyzing preliminary observations and identifying potential problems that could arise in state cross-border linkages. In an age of M&As, being able to map for foreign investors the state business landscape offers a powerful tool in determining the worthwhileness of the investment recipient.