Does political corruption affect mergers and acquisitions decisions? Evidence from China

Yang, Hao; Zhang, Qiusheng; Xiao-fang, Zhao; Wang, Zhongchao

doi:10.1016/j.iref.2021.12.003

Cited by 10 publications

(14 citation statements)

References 55 publications

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“…Rural e-commerce supported by internet technology enhances rural residents' market participation (Ogutu et al, 2014), enabling agricultural producers to connect directly to online markets, broaden sales channels, reduce intermediary costs, increase sales prices, mitigate information asymmetry issues (Ullah et al, 2023), and directly augment rural residents' agricultural income, thus narrowing the rural-urban income gap. From the supply side, internet development assists farmers in accurately obtaining market demand information (Leng, 2022), optimizing production decisions and plans, lowering production costs, enhancing productivity (Wang et al, 2024), promoting agricultural industry upgrading (Nawab et al, 2022), and reducing income gap between rural and urban residents. Additionally, internet development can optimize agricultural industry structure by promoting technological innovation, fostering industry integration, and facilitating industrial transformation and upgrading, thereby revitalizing rural economies and narrowing rural-urban income gap.…”

Section: Theoretical Mechanisms and Research Hypothesis 21mentioning

confidence: 99%

Internet Development, Population Aging and Urban-rural Income Gap: An Empirical Analysis Based on Provinces in China

Xu,

Zhang,

Chen

2024

Advances in Management and Applied Economics

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This study utilizes panel data from Chinese provinces spanning 2013 to 2021 to establish a comprehensive evaluation index system for the level of Internet development. It investigates the impact of Internet development and its sub-dimensions on the urban-rural income gap and further examines the moderating effect of population aging. The findings suggest that Internet development can significantly improve the urban-rural income gap by increasing the farm and non-farm incomes of rural residents. Specifically, from a sub-dimension perspective, Internet infrastructure, commercial scale, and development potential play significant roles in narrowing the income gap, with substantial effects observed. Moreover, considering regional heterogeneity, the narrowing effect of the Internet on the urban-rural income gap in the Northeast, Central, and Western regions is significant and roughly equivalent, surpassing that of the Eastern region. Population aging leads to synchronous changes in the age structure of Internet users; the "silver-haired digital divide" impedes the elderly population's access to and use of the Internet, thereby inhibiting the shrinking effect of Internet development on the urban-rural income gap. Further investigation reveals that the imbalance in the urban-rural population aging process, with the degree of rural aging outpacing urban areas, is a significant factor contributing to this inhibitory effect. Keywords: Urban-rural Income Gap, Internet development, Population Aging, Moderating effect.

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Section: Theoretical Mechanisms and Research Hypothesis 21mentioning

confidence: 99%

Internet Development, Population Aging and Urban-rural Income Gap: An Empirical Analysis Based on Provinces in China

Xu,

Zhang,

Chen

2024

Advances in Management and Applied Economics

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“…In addition to economic considerations, such acquirers may pursue administrative, political, or social goals when contemplating an acquisition (Schweizer et al, 2019). The role of political connectedness in shaping transaction outcomes can be both positive and negative (Ren et al, 2019; Yang et al, 2022). Third, the industry composition of M&As is largely reflective of the structure of the underlying economy with the bulk of deals occurring in industrials and manufacturing.…”

Section: Literature Reviewmentioning

confidence: 99%

Do Corporate Consolidations Affect the Competitive Positioning of Non-Financial Firms in China?

Osiichuk,

Wnuczak

2023

SAGE Open

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In a quest for economies of scale, access to technologies, and, most importantly, expansion of market share, Chinese public companies have been engaged in several consecutive waves of mergers and acquisitions (M&As) involving mostly domestically domiciled non-listed targets from the same or adjacent industries. Relying on a comprehensive panel dataset of 7,998 transactions completed between 1993 and 2020 by 2,842 publicly listed acquirers domiciled in China, the paper attempts to establish whether M&A deals allow acquirers to improve their market share and, consequently, their relative market position. We use dynamic panel regression and ordered logit models to establish and quantify the link between deal characteristics and the post-deal market share of the combined entities. Our empirical findings demonstrate that corporate consolidations exercise no significant impact on the relative competitive positioning of firms. Only acquisitions by industry leaders produce a sizeable increase in the latter’s market share and lead to higher industry concentration. Most consolidations occur among outsiders exhibiting a high degree of similarity, relatively lower profitability, and stagnant market shares within the more competitive industries with higher rates of firm creation. These consolidations, often in the form of mergers, are not effective in advancing the combined entities’ competitive positioning. Despite the fact that the bulk of corporate consolidations appears unlikely to constitute a threat to competition in the medium term, careful regulatory oversight may be warranted within the currently fragmented and highly commoditized industries, which appear likely to consolidate at the fastest pace. JEL Classification: G30, G32.

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“…Furthermore, Amihud and Lev (1981) find that the motive for M&A is to diversify the business to decrease the firm-specific risk. Fourth, M&A transactions are carried out to replace low-performance management (Tichy, 2001, Mueller & Sirower, 2003 with higher-performance management with more substantial cultural alignment (Zhao, 2021). Fifth, Kitching (1967) and Levinson (1970) proposed management psychology as the strategic motive.…”

Section: Review Of Literature and Hypotheses Developmentmentioning

confidence: 99%

“…The firm may invest in more beneficial projects to the management than shareholders. A recent study by Yang, Zhang, Zhao, and Wang (2022) shows that the agency problem also permeates outside the firm through agent involvement in political corruption. The study also shows that the positive wealth effect is lower in more corrupt districts.…”

Section: Review Of Literature and Hypotheses Developmentmentioning

confidence: 99%

A Model to Identify the Potential Target for Leveraged Buyout

Hermawan,

Tanuwijaya,

Aditama

et al. 2022

J. Keuang. dan Perbank.

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This study aims to find a model based on agency theory to identify the target firms of leveraged buyout (LBO) transactions one year ahead. The likelihood of a firm being a target in an LBO transaction is estimated using logistic regression. The dependent variable is defined as one for the LBO target and zeroes otherwise. The independent variables are a firm's financial characteristics related to agency problems: leverage, tangible assets, free cash flow, market-to-book value ratio, profitability, and revenue growth. The sample is public-to-private LBO transactions in the United States from 2009 to 2019. We find that a firm with high leverage and free cash flow is more likely to become an LBO target. The findings are consistent with the agency theory. The management uses firm high free cash flow to gain more debt to pursue their benefits which is detrimental to shareholders' interest. Contrary to previous research, the firm's tangible asset does not increase the likelihood of becoming an LBO target.

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Does political corruption affect mergers and acquisitions decisions? Evidence from China

Cited by 10 publications

References 55 publications

Internet Development, Population Aging and Urban-rural Income Gap: An Empirical Analysis Based on Provinces in China

Internet Development, Population Aging and Urban-rural Income Gap: An Empirical Analysis Based on Provinces in China

Do Corporate Consolidations Affect the Competitive Positioning of Non-Financial Firms in China?

A Model to Identify the Potential Target for Leveraged Buyout

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