The impact of firm ownership, board monitoring on operating performance of Chinese mergers and acquisitions

Agyenim Boateng; Xiao Gang Bi; Sanjukta Brahma

doi:10.1007/s11156-016-0612-y

The impact of firm ownership, board monitoring on operating performance of Chinese mergers and acquisitions

Agyenim Boateng, Xiao Gang Bi, Sanjukta Brahma

Department of Finance, Accounting and Economics

Research output: Journal Publication › Article › peer-review

33 Citations (Scopus)

Abstract

In this paper, we employ board monitoring mechanisms and within-firm governance variables to investigate the operating performance of 340 mergers and acquisitions in China over the 2004–2011 period. Our results document a significant deterioration in post-acquisition operating performance of acquiring firms over 12–36 months. We find independent directors, managerial shareholding, ownership concentration have a positive and significant impact on operating performance of acquiring firms. However, the related party transactions exert a negative and significant effect on matched control adjusted ROA. Further analysis of our sub-sample indicates that privately owned enterprises are better monitors compared to the state owned enterprises.

Original language	English
Pages (from-to)	925-948
Number of pages	24
Journal	Review of Quantitative Finance and Accounting
Volume	49
Issue number	4
DOIs	https://doi.org/10.1007/s11156-016-0612-y
Publication status	Published - 1 Nov 2017

Keywords

Firm ownership
Mergers and acquisitions
Monitoring
Performance

ASJC Scopus subject areas

Accounting
General Business,Management and Accounting
Finance

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10.1007/s11156-016-0612-y

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abstract = "In this paper, we employ board monitoring mechanisms and within-firm governance variables to investigate the operating performance of 340 mergers and acquisitions in China over the 2004–2011 period. Our results document a significant deterioration in post-acquisition operating performance of acquiring firms over 12–36 months. We find independent directors, managerial shareholding, ownership concentration have a positive and significant impact on operating performance of acquiring firms. However, the related party transactions exert a negative and significant effect on matched control adjusted ROA. Further analysis of our sub-sample indicates that privately owned enterprises are better monitors compared to the state owned enterprises.",

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N2 - In this paper, we employ board monitoring mechanisms and within-firm governance variables to investigate the operating performance of 340 mergers and acquisitions in China over the 2004–2011 period. Our results document a significant deterioration in post-acquisition operating performance of acquiring firms over 12–36 months. We find independent directors, managerial shareholding, ownership concentration have a positive and significant impact on operating performance of acquiring firms. However, the related party transactions exert a negative and significant effect on matched control adjusted ROA. Further analysis of our sub-sample indicates that privately owned enterprises are better monitors compared to the state owned enterprises.

AB - In this paper, we employ board monitoring mechanisms and within-firm governance variables to investigate the operating performance of 340 mergers and acquisitions in China over the 2004–2011 period. Our results document a significant deterioration in post-acquisition operating performance of acquiring firms over 12–36 months. We find independent directors, managerial shareholding, ownership concentration have a positive and significant impact on operating performance of acquiring firms. However, the related party transactions exert a negative and significant effect on matched control adjusted ROA. Further analysis of our sub-sample indicates that privately owned enterprises are better monitors compared to the state owned enterprises.

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The impact of firm ownership, board monitoring on operating performance of Chinese mergers and acquisitions

Abstract

Keywords

ASJC Scopus subject areas

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