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    How do political connections cause SOEs and non-SOEs to make different M&A decisions/performance? Evidence from China

    Access Status
    Fulltext not available
    Authors
    Liu, Q.
    Luo, Tianpei
    Tian, G.
    Date
    2017
    Type
    Journal Article
    
    Metadata
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    Citation
    Liu, Q. and Luo, T. and Tian, G. 2017. How do political connections cause SOEs and non-SOEs to make different M&A decisions/performance? Evidence from China. Accounting and Finance.
    Source Title
    Accounting and Finance
    DOI
    10.1111/acfi.12302
    ISSN
    0810-5391
    School
    Department of Finance and Banking
    URI
    http://hdl.handle.net/20.500.11937/57824
    Collection
    • Curtin Research Publications
    Abstract

    © 2017 AFAANZ. This study examines the impact that political connections have on Mergers and Acquisitions (M & A) performance and the decisions of Chinese listed firms. We find that political connections destroy (create) value in SOEs (non-SOEs). Our findings show that connected SOEs are more likely to acquire local targets, especially when the local unemployment rate is high and when the firms are controlled by the local government, and they are less likely to conduct vertical mergers. M & A decisions of connected non-SOEs are less influenced by the government; instead, political connections in non-SOEs help bidders to integrate vertically and obtain external financing support.

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