Will investors’ excitement last? Determinants of investors’ responses to cross-border acquisitions by Chinese firms
dc.contributor.author | Zeng, Rong | |
dc.date.accessioned | 2024-08-08T16:13:12Z | |
dc.date.available | 2024-08-08T16:13:12Z | |
dc.date.issued | 2023-05-18 | |
dc.date.submitted | 2024-06-13T21:54:32Z | en_US |
dc.description.abstract | Previous studies have found that in the short term, investors in emerging economies tend to react optimistically to cross-border acquisitions. However, studies in both financial economics and strategic management have acknowledged that there may be short-term abnormal returns in the stock market. As such, based on a behavioral perspective on investor valuation, we examine whether and when investors’ initial reactions are sustained using a sample of cross-border acquisitions by Chinese firms from 1998 to 2018. We find that the investor’s initial positive reactions are more likely to be sustained in the long term when (1) a cash payment is used for the acquisition, (2) the acquiring firm has more international acquisition experience, (3) the target firm’s country has a large economy, and (4) the target firm’s country has a culture of high uncertainty avoidance. Our findings extend the behavioral perspective on market reactions to cross-border acquisitions, and we contend that investors’ market valuations are a complex process that relies on various contextual cues. We contribute to an improved understanding of how investors evaluate a firm’s cross-border acquisitions over time. | |
dc.identifier.doi | https://doi.org/10.1016/j.intfin.2023.101785 | |
dc.identifier.uri | http://hdl.handle.net/1993/38371 | |
dc.language.iso | eng | |
dc.publisher | Elsevier | |
dc.subject | behavioral perspective; contextual cues; cross-border acquisitions; emerging countries; investor reactions | |
dc.title | Will investors’ excitement last? Determinants of investors’ responses to cross-border acquisitions by Chinese firms | |
dc.type | research article | |
local.author.affiliation | Asper School of Business::Department of Business Administration | |
oaire.citation.startPage | 101785 | |
oaire.citation.title | Will investors’ excitement last? Determinants of investors’ responses to cross-border acquisitions by Chinese firms | |
oaire.citation.volume | 85 |
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