Choose Domestic M&A or Cross-border M&A？
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| Title | Choose Domestic M&A or Cross-border M&A？
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| Author | Liu Liya and He Yanlin |
| Organization | School of Finance, Shanghai University of Finance and Economics |
| Email | liuliya@mail.shufe.edu.cn；minbadly_he@yeah.net |
| Key Words | Production Potential, Market Timing, M&A, Foreign Direct Investment |
| Abstract | With China’s M&A policy gradually relaxing from the micro level, how to control M&A from the macro level need urgently to know the mechanism of how macroeconomic variables affect overall M&A.Based on the difference between domestic and cross-border M&A in acquiring company’s micro decision, we build a macro decision model of domestic and cross-border M&As’ completed numbers of a country; and through the model we can research the effect of production potential,aquirer’s market timing and foreign M&A capital to domestic companys’ M&A activity. Then we empirically test the model’s predictions using China’s M&A quarterly data from year 2001 to year 2013.The results prove that, most of the macroeconomic variables have the different effect on domestic and cross-border M&A.The wage, tax rate and market scale have the opposite effect to the two types of M&A; the rising stock market and decreased loan rate play the role on promoting M&A, and foreign M&A capital is a strong competitor to domestic M&A.In the end, we put forward the corresponding policy recommendations from the macro level for China. |
| Serial Number | WP900 |
| Time | 2015-07-14 |
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