Does High-Speed Railway Opening Improve the M&amp;A Behavior?

Lin, Han; Li, Xingchan; Yang, Yanshu

doi:10.3390/su14031206

Cited by 4 publications

(5 citation statements)

References 35 publications

(45 reference statements)

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“…Bargeron et al (2008) find that the average M&A premium paid by private mergers of public firms was 35.02%, lower than the 46.5% paid by public mergers, suggesting that the nature of ownership (SOE) is an important factor in determining M&A premium [27]. According to Han et al (2022), we also control geographical characteristics [17], such as the characteristics of economic development (LnGDP), economic openness (Open), and unemployment rate (Unemploy), at the regional level of the main merger company.…”

Section: Control Variablesmentioning

confidence: 99%

“…However, less research on the economic consequences of an HSR opening has focused on corporate M&A, a critically important resource allocation strategy. Merely two papers focus on the impact of an HSR opening on M&A behavior (Han et al, 2022;Jin et al, 2021) [17,18], without paying attention to the impact of M&A premium. This paper shows that an HSR opening, simultaneously, suppresses M&A premium through the channels of "reducing information asymmetry" and "alleviating agency problems", providing new empirical evidence on the economic consequences of an HSR opening at the micro-company level.…”

Section: Introductionmentioning

confidence: 99%

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Could the Opening of HSR Reduce the M&A Premium?

et al. 2022

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This study takes the merger and acquisition (M&A) events completed by A-share listed companies in Shanghai and Shenzhen stock markets from 2006 to 2019 as the research samples and uses the dual difference method to test the impact of a “high-speed railway (HSR) opening”, a quasi-natural experimental event, on M&A premium. The results show that the opening of an HSR can significantly inhibit the M&A premium of listed companies in corresponding prefecture-level administrative regions. The results of the mechanism test show that an HSR opening affects M&A premium through two channels: “reducing information asymmetry” and “alleviating agency problems”. This study discusses the impact of an HSR opening on M&A, which helps to provide new empirical evidence for the economic consequences of an HSR opening from the micro level and provides a new perspective for research on the factors affecting M&A premium.

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Section: Control Variablesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Could the Opening of HSR Reduce the M&A Premium?

et al. 2022

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“…The M&A decision-influencing factors could be divided into macroscopic aspects and microcosmic aspects [48]. The macroscopic aspects include the corresponding background, for instance, the financial crisis, marketization, national risk, and national integration.…”

Section: Cross-border Mandasmentioning

confidence: 99%

Industrial Policy’s Effect on Cross-Border Mergers’ Decisions—Theoretical and Empirical Analysis

Chen

2022

Sustainability

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To explore the relationship between industrial policy and cross-border M&As in Chinese enterprises, the PSM method and a two-way fixed model were used. Using a sample of A-share listed companies during the period 2005–2019, we theoretically and empirically analyzed the mediating role of financial constraints and the moderating role of political connections between the companies. It was found that industrial policy has a significant positive effect on cross-border M&As and that firms’ financial constraints mediate the relationship between industrial policy and M&As. Political connections moderate the relationship between industrial policy and M&As. This study enriches the research on the relationship between industrial policy and firms’ M&A decisions from a micro perspective, and provides evidence of industrial policy promoting cross-border M&As through alleviating the financial constraints of the firms.

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“…The reduction in information asymmetry helps auditors know more information, thereby reducing audit risks [17] and audit fees [18]. For clients, the HSR opening can promote the flow of information, alleviate information asymmetry, help investors fully understand enterprise information, reduce investors' supervision costs [46,47], strengthen the supervision of management, and reduce enterprises' agency costs. The lower the enterprise agency costs, the lower the audit fees [48].…”

Section: Information Asymmetry Perspectivementioning

confidence: 99%

The High-Speed Railway Opening and Audit Fees: Evidence from China

Zhang

Jun

2022

Sustainability

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By constructing a staggered difference-in-differences model, we examined the effect of the high-speed railway opening on audit fees and its mechanism. The high-speed railway opening significantly reduces audit fees, and the inhibitory effect is more pronounced in firms located in non-central cities and small- and medium-sized audit firms. Furthermore, the high-speed railway opening mainly affects the audit fees by intensifying the competition in the audit market, but information asymmetry has no significant impact, indicating that the high-speed railway opening mainly reduces the audit fees by reducing the audit costs. In addition, the high-speed railway opening can improve the audit quality, which further shows that the high-speed railway opening can promote reasonable competition in the audit market.

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Does High-Speed Railway Opening Improve the M&A Behavior?

Cited by 4 publications

References 35 publications

Could the Opening of HSR Reduce the M&A Premium?

Could the Opening of HSR Reduce the M&A Premium?

Industrial Policy’s Effect on Cross-Border Mergers’ Decisions—Theoretical and Empirical Analysis

The High-Speed Railway Opening and Audit Fees: Evidence from China

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