Abstract:This study examines the effect of controlling shareholder stock pledge on corporate acquisition decisions and associated performance. Using the sample of listed firms in China, we find that pledging firms, consistent with the aggravated expropriation hypothesis, initiate more takeovers, and further, acquisitions conducted by pledging firms obtain lower announcement returns. We address the endogenous concerns by using the instrumental variable and the difference in differences approaches. Moreover, our channel … Show more
Set email alert for when this publication receives citations?
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.