Investor protection and cross-border acquisitions by Chinese listed firms: The moderating role of institutional shareholders

摘要

This study examines whether-and if so, how-market value for the acquirers from emerging markets is influenced by changes in investor protection induced by acquisitions, in interaction with institutional shareholdings in acquiring firms. Using a sample of Chinese listed acquiring firms for the period 2002-2012, the empirical findings show that Chinese companies gain higher abnormal returns at the takeover period through acquisitions of targets domiciled in countries with superior investor protection to China. Interestingly, this relationship between investor protection and acquirer returns is moderated by institutional ownership in acquiring firms, which is however more prominent in nonstate-owned Chinese companies.