Does M&A financing affect firm performance under different ownership types?
Mergers and acquisitions (M&A) are an essential way for enterprises to achieve sustainable development. As large sums of money are typically involved in M&A transactions, financing is a vital factor in outcomes. This study examines the relation between equity and debt financing of M&A on...
| Main Authors: | , , , , |
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| Format: | Journal Article |
| Published: |
2020
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| Online Access: | http://hdl.handle.net/20.500.11937/85765 |
| _version_ | 1848764769974091776 |
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| author | Chen, J. Zhao, X. Niu, X. Fan, Ying Han Taylor, Grantley |
| author_facet | Chen, J. Zhao, X. Niu, X. Fan, Ying Han Taylor, Grantley |
| author_sort | Chen, J. |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | Mergers and acquisitions (M&A) are an essential way for enterprises to achieve sustainable development. As large sums of money are typically involved in M&A transactions, financing is a vital factor in outcomes. This study examines the relation between equity and debt financing of M&A on subsequent performance, and the effect of ownership (state-owned enterprises versus private-owned enterprises) on M&A performance in China. We are motivated to examine the relation between financing methods and M&A performance in China because the differences in ownership, resource availability and policy support by the government for many firms may affect subsequent performance. Using a large sample of Chinese A-share listed companies between 2009 and 2016, we find that equity-financed M&A transactions lead to significantly better performance than debt-financed transactions. Equity-financed M&A transactions of state-owned enterprises (SOEs) perform significantly better as compared to debt-financed M&A, whereas equity-financed M&A transactions of private-owned enterprises (POEs) have little effect on their performance. This study extends our insights into the relation between M&A financing types and firm performance under different ownership types in the context of emerging markets. |
| first_indexed | 2025-11-14T11:24:38Z |
| format | Journal Article |
| id | curtin-20.500.11937-85765 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T11:24:38Z |
| publishDate | 2020 |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-857652021-10-27T07:31:25Z Does M&A financing affect firm performance under different ownership types? Chen, J. Zhao, X. Niu, X. Fan, Ying Han Taylor, Grantley Mergers and acquisitions (M&A) are an essential way for enterprises to achieve sustainable development. As large sums of money are typically involved in M&A transactions, financing is a vital factor in outcomes. This study examines the relation between equity and debt financing of M&A on subsequent performance, and the effect of ownership (state-owned enterprises versus private-owned enterprises) on M&A performance in China. We are motivated to examine the relation between financing methods and M&A performance in China because the differences in ownership, resource availability and policy support by the government for many firms may affect subsequent performance. Using a large sample of Chinese A-share listed companies between 2009 and 2016, we find that equity-financed M&A transactions lead to significantly better performance than debt-financed transactions. Equity-financed M&A transactions of state-owned enterprises (SOEs) perform significantly better as compared to debt-financed M&A, whereas equity-financed M&A transactions of private-owned enterprises (POEs) have little effect on their performance. This study extends our insights into the relation between M&A financing types and firm performance under different ownership types in the context of emerging markets. 2020 Journal Article http://hdl.handle.net/20.500.11937/85765 10.3390/SU12083078 http://creativecommons.org/licenses/by/4.0/ fulltext |
| spellingShingle | Chen, J. Zhao, X. Niu, X. Fan, Ying Han Taylor, Grantley Does M&A financing affect firm performance under different ownership types? |
| title | Does M&A financing affect firm performance under different ownership types? |
| title_full | Does M&A financing affect firm performance under different ownership types? |
| title_fullStr | Does M&A financing affect firm performance under different ownership types? |
| title_full_unstemmed | Does M&A financing affect firm performance under different ownership types? |
| title_short | Does M&A financing affect firm performance under different ownership types? |
| title_sort | does m&a financing affect firm performance under different ownership types? |
| url | http://hdl.handle.net/20.500.11937/85765 |