The Study on the Impact of Political Connection on the Performance of Cross-border Mergers and Acquisitions
Abstract
With the development of economic globalization, more and more enterprises in China have exploited overseas markets through cross-border M&A activities and enhanced their international competitiveness. Compared with developed countries, China's distinctive political environment and policy changes in keeping pace with the times have a great impact on cross-border M&A activities. The relationship between enterprises and the government has an important impact on cross-border M&A performance. Based on the sample of 108 cross-border M&A cases of A-share listed companies from 2008 to 2014, this paper studies the impact of political connection on cross-border M&A performance, adopting the assignment method to measure the political connection. The results show that political connections have significant positive effects on cross-border M&A performance and the relationship is affected by the government intervention. The greater the degree of government intervention, the weaker the positive effect of political connections on cross-border M&A performance.
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