External sources of political connections: financial advisors and Chinese acquisitions
This study considers the effects of an external form of political connection, namely, politically connected financial advisors, on the value creation of Chinese acquiring firms over the period 2004–2014. Using data consisting of 1,623 Chinese mergers and acquisitions (M&As) deals, we show that p...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Wiley
2018
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| Online Access: | https://eprints.nottingham.ac.uk/53747/ |
| _version_ | 1848798982751387648 |
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| author | Bi, XiaoGang Wang, Danni |
| author_facet | Bi, XiaoGang Wang, Danni |
| author_sort | Bi, XiaoGang |
| building | Nottingham Research Data Repository |
| collection | Online Access |
| description | This study considers the effects of an external form of political connection, namely, politically connected financial advisors, on the value creation of Chinese acquiring firms over the period 2004–2014. Using data consisting of 1,623 Chinese mergers and acquisitions (M&As) deals, we show that politically connected financial advisors create significantly higher market value for acquiring firms, after controlling for firms' own political connections and reputation. Further analysis indicates that the appointment of political advisers can improve an acquiring firm's long‐term industry‐adjusted operating performance and help acquirers reduce bid premiums. We show that private firms and stock‐pay acquisitions are more likely to appoint politically connected financial advisors in M&A transactions, whereas our findings remain unchanged after controlling for endogeneities. |
| first_indexed | 2025-11-14T20:28:26Z |
| format | Article |
| id | nottingham-53747 |
| institution | University of Nottingham Malaysia Campus |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T20:28:26Z |
| publishDate | 2018 |
| publisher | Wiley |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | nottingham-537472018-09-07T08:42:20Z https://eprints.nottingham.ac.uk/53747/ External sources of political connections: financial advisors and Chinese acquisitions Bi, XiaoGang Wang, Danni This study considers the effects of an external form of political connection, namely, politically connected financial advisors, on the value creation of Chinese acquiring firms over the period 2004–2014. Using data consisting of 1,623 Chinese mergers and acquisitions (M&As) deals, we show that politically connected financial advisors create significantly higher market value for acquiring firms, after controlling for firms' own political connections and reputation. Further analysis indicates that the appointment of political advisers can improve an acquiring firm's long‐term industry‐adjusted operating performance and help acquirers reduce bid premiums. We show that private firms and stock‐pay acquisitions are more likely to appoint politically connected financial advisors in M&A transactions, whereas our findings remain unchanged after controlling for endogeneities. Wiley 2018-07-31 Article PeerReviewed application/pdf en https://eprints.nottingham.ac.uk/53747/1/Bi_et_al-2018-International_Journal_of_Finance_%26_Economics.pdf Bi, XiaoGang and Wang, Danni (2018) External sources of political connections: financial advisors and Chinese acquisitions. International Journal of Finance & Economics . pp. 1-18. ISSN 1099-1158 acquisition performance; financial advisors; mergers and acquisitions; political connection; value creation http://dx.doi.org/10.1002/ijfe.1644 doi:10.1002/ijfe.1644 doi:10.1002/ijfe.1644 |
| spellingShingle | acquisition performance; financial advisors; mergers and acquisitions; political connection; value creation Bi, XiaoGang Wang, Danni External sources of political connections: financial advisors and Chinese acquisitions |
| title | External sources of political connections: financial advisors and Chinese acquisitions |
| title_full | External sources of political connections: financial advisors and Chinese acquisitions |
| title_fullStr | External sources of political connections: financial advisors and Chinese acquisitions |
| title_full_unstemmed | External sources of political connections: financial advisors and Chinese acquisitions |
| title_short | External sources of political connections: financial advisors and Chinese acquisitions |
| title_sort | external sources of political connections: financial advisors and chinese acquisitions |
| topic | acquisition performance; financial advisors; mergers and acquisitions; political connection; value creation |
| url | https://eprints.nottingham.ac.uk/53747/ https://eprints.nottingham.ac.uk/53747/ https://eprints.nottingham.ac.uk/53747/ |