M&As and Price Manipulations in China
M&As and Price Manipulations in China
Author(s): Chen Cuiping, Jarko Fidrmuc, Fabian ReckSubject(s): National Economy, Business Economy / Management, Financial Markets, Business Ethics
Published by: Ekonomický ústav SAV a Prognostický ústav SAV
Keywords: M&As; economic synergy; price manipulations;
Summary/Abstract: In recent years, M&As have become popular among Chinese companies, with many of them receiving a high premium. This paper empirically analyzes the motivation of high-premium M&As from the perspective of price manipulations. The sample consists of 1,013 Chinese companies, listed on the Shanghai and Shenzhen stock exchange, and covers the period from 2013 to 2018. Our results indicate that benefit seeking of major shareholders on the costs of minor investors is a key determinant for the merger of companies. In comparison, economic synergy effects are not the predominant factor of M&As. Therefore, legal reforms by the Chinese Market Supervisory Department are necessary to protect smaller investors.
Journal: Ekonomický časopis
- Issue Year: 69/2021
- Issue No: 03
- Page Range: 223-236
- Page Count: 14
- Language: English