An Empirical Study of the Performance of China's Cross-border Mergers & Acquisitions Activity

This paper adopts accounting-based and event study approaches to analyze the performance of Chinese enterprises' cross-border M&A by focusing on 27 cases of reverse cross-border M&A in Shanghai and Shenzhen stock market from 2000 to 2005. The study finds that after transnational M&A there is a remarkable trend of the profitability and growth of the Chinese enterprises, which first falls and then rises. This trend shows that it is a long-term hard work to improve the performance of reverse transnational M&A, which aims to obtain the foreign advanced technology and resources. On the other hand, the transnational M&A conducted by Chinese listed corporations are well accepted by the stock market and bring the shareholders the effect of market wealth. But there is some information leakage to a certain extent in the stock market, which indicates that the stock market is a weak efficient market