The Impact of Foreign Acquisitions on Firm Performance: Evidence from the Chinese Capital Market

摘要

This paper analyzed the wealth effects and operating performance of 49 foreign acquisitions announced by Chinese listed companies between 1995 and 2005. The result suggests that the CARs of Chinese targets achieved 2.24% during the whole event window which indicates that foreign acquisitions in China did create value for shareholders. In addition, the result of accounting-based measures shows that the financial performance of Chinese targets has been improved in the second and third year after acquisition compared to the year before acquisition. Hereby, this paper considers that foreign acquisitions have a positive effect on the performance of Chinese listed companies.