Modeling the factors that influence knowledge transfer in mergers and acquisitions

This paper constructs a model on the factors that influence knowledge transfer in mergers and acquisitions(M&A) and validates it via questionnaire surveys. Using 125valid collected questionnaires, multiple linear regression analysis and hierarchical regression analysis showed that five out of the ten factors had a positive effect on knowledge transfer effect. The ranking of factor importance, from high to low, was knowledge explicitness, relationship quality, learning intent, advanced transfer activities, and learning capability, which is fairly consistent with positive factors observed in other interorganizational knowledge transfer researches. Our results also showed that one of the control variables(size of acquired firm) had neither a direct or indirect effect on knowledge transfer in M&A. Additionally, our research found that knowledge distance and degree of M&A integration had a positive influence on knowledge transfer effect at the early stage after M&A, but had a negative influence at the late stage. Based on this research, several suggestions for knowledge transfer in M&A are proposed.

Selection of Mergers and Acquisitions by Foreign Capital in Open Economies

By a linear Cournot model, the factors associated with the integration of two firms are discussed in terms of their effects on the private surplus and the social welfare in economies with varying extent of openness. Meanwhile, the trade policy of the host government is taken into account. It is concluded that the more open the economy and the more intense the competition, the less profitable the integration; the most important determinant to the changes of the domestic social welfare is the industry strength of the host country. The host authority can enhance the domestic social welfare in two ways： to adjust the trade policy and to only approve the socially desirable cross-border mergers and acquisitions.

The Efficient Market Theory and Mergers and Acquisitions （M＆As） Puzzle： Evidence From Italy

The efficient market theory is a central point in finance. If the capital market is competitive, the investors cannot expect superior gains from their investment strategies with respect to the risk profile. Event studies are an approach to verify the impact of the information on the stock prices. In an efficient market, stock prices should fully, promptly, and quickly capture all the information. Instead, the market shows phenomena of an under-reaction and over-reaction for both the short and the long run. The mergers and acquisitions （M＆As） are examples of anomalies. Often, the bidder companies record the negative abnormal returns for both the short and the long run. In contrast to the efficient market theory, the empirical evidence shows that this phenomenon is widespread in all （or most of） the countries of the world. This work examines the long-run performance in M＆As. For this purpose, 40 bidders were observed in Italy during the period of 1994-2008 among listed companies. The buy and hold abnormal returns （BHARs） methodology was used, with which it was possible to observe the returns for three years following the deal.

Due Diligence in Mergers and Acquisitions in Emerging Markets： Evaluated Risk Factors From the Academic and Practical View

The obviously ever increasing number of corporate acquisitions in recent decades has improved the general knowledge and awareness of due diligence for both the industry and research. In the current challenging business environment, acquisitions face a higher degree of risk profiles, especially cross-border acquisitions in the emerging markets. Conducting a thorough due diligence investigation in the context of an acquisition is more important now than ever. In a broad analysis, this paper researches the key risk factors in the acquisition process and their assessment within a due diligence audit in the acquisition phase. The task of this paper is to match the academic and practical view in order to give a more complete understanding of risk factors to be covered in due diligence audit. The starting point is the research of academic findings which basically concentrate on common approaches considering financial, legal, commercial, and some other issues in domestic acquisitions and in developed countries. In contrast, this paper considers risk factors in cross-border and emerging markets transactions. In addition, a number of business consultants publish studies based on surveys on this topic which reflect typical risk factors based on experience of their customers being involved in cross-border acquisitions. Their risk assessment consists of specific regulatory, political, and other factors, which may lead to commercial and reputational impediments in cross-border acquisitions. The outcome of the comparison is a comprehended list of evaluated risk factors, whereby the academic findings are complemented and supported by the practical experience in the business consultant＇s studies. Moreover, the practical approach points to the fact that due diligence scope needs to be suited to the dynamics of the markets. The comparison and the comprehended list of evaluated risk factors call for a more integrated system of due diligence and show herein the research deficit. Hence, the novelty is the compendium of evaluated risk factors which should be assessed in the pre-acquisition phase. The originality of the paper is given by a unique analysis of academic work about acquisition due diligence literature and consultant studies from anonymized practical experience based on insider information.

Evolutionary investment network and the emerging energy power in Central Asia:From the perspective of cross-border mergers and acquisitions

Central Asia is emerging as an important pole of global economic and political power,thanks to its unique location at the heart of Eurasia and its abundance in energy reserves.This study explores the social power change in Central Asia from the perspective of cross-border mergers and acquisitions(M&A)by using the social network method.The main results are as follows:(1)The complexity of the energy M&A network has significantly decreased after the financial crisis in 2008.In the meantime,energy M&A became an important way to enhance energy power for buyer countries.Betweenness centrality is becoming the most significant factor affecting energy power,yet the effect of out-degree is weakening.(2)The community underwent multifaceted restructuring,which reflected the shift of energy power in Central Asia.Kazakhstan is the most powerful country in the energy sector in Central Asia.In addition,East Asian countries/regions,represented by China,are actively enhancing their energy power.(3)Different M&A modes reflect various M&A motivations of countries in the energy sector.In the future,more efforts should be made to promote the establishment of a pragmatic and efficient multilateral energy cooperation mechanism and strength the cooperation of the economy and energy finance when China participates in the energy market in Central Asia.

Financing Constraints and the Mode of Outward Foreign Direct Investment:Cross-Border Mergers and Acquisitions or Greenfield Investment

In this paper,two investment modes,greenfield investment and cross-border mergers and acquisitions,are introduced on the basis of Manova(2008),and it is found that enterprises with less financing constraints tend to choose cross-border mergers and acquisitions.Therefore,this paper takes Chinese industrial enterprises that conducted cross-border mergers and acquisitions and greenfield investment in 2003−2010 as examples to test the above hypothesis.The result shows that enterprises with lower financing constraints are more likely to choose cross-border mergers and acquisitions,while those with stronger constraints choose greenfield investment.More specifi cally,a 1%reduction in financing constraints raises the probability of choosing cross-border mergers and acquisitions by 2.51%.The authors also find that the influence of financing constraints varies under different investment motivation.For business service and production-related investment,enterprises with lower financing constraints tend to choose cross-border mergers and acquisitions;while for R&D investment,financing constraints have no impact on the choice of investment mode.

Mergers and Acquisitions in Ownership Restructuring of Chinese Firms

This paper investigates mergers and acquisitions （M＆A） in the context of firm ownership restructuring in China, via several theoretical lenses including organizational learning and population ecology theories. It highlights the effect of organizational learning on the choice of M＆A in ownership restructuring, based on the assumption that the choice might be favored by poor-performing firms. By employing a hierarchical linear regression model, this article examines the cross-level moderating effects of the density of ownership restructuring patterns on the performance-M＆A relationship. Several key findings have been revealed. At the individual firm level, performance is negatively related to its choice of M＆A. The ownership restructuring pattern that firms adopted is positively associated with its choice of M＆A. Moreover, at the industry level, the density of patterns in an industry positively moderates the performance-M＆A relationship.

Cash holdings,corporate governance,and acquirer returns

Background:The wealth effect of limiting shareholder rights via anti-takeover provisions(ATPs)is a contentious issue.By taking the differential effect hypothesis perspective,our study aims to provide additional evidence about the relation between ATPs and acquisition performance.Methods:We examine the interaction of antitakeover provisions(ATPs)with firm characteristics and governance environment in explaining the cross-section of bidder announcement returns.Using a sample of 3,340 completed acquisitions by 1,217 firms during 1996–2006,we test the association between ATPs,firm characteristics,and governance environments with bidder returns.Results:We find that ATPs hurt acquisition performance only when acquirers hold a high level of excess cash.Similarly,ATPs are associated with lower bidder returns only when industry competition is weak and public pension fund ownership is low as well.By contrast,when industry competition is intense and/or public pension fund ownership is high,ATPs do not hurt bidder returns.Conclusions:The complementarity among ATPs,excess cash,industry competition,and public pension fund ownership suggests that ATPs per se do not necessarily result in value-destroying acquisitions for all firms.We address the endogeneity issue of unknown variables by using a proxy for firm prestige and draw the same conclusions.

Effect of Cross-Border Acquisitions on Businesses Performance of Slovak Acquiring Companies

Currently, businesses or companies apply various tools of financial engineering on improvement of their performance. One of such tools refers to acquisitions through which companies can profit from synergic effects, reduce operating cost and tax expenses, and improve their market position. This paper is aimed at examining the effect of cross-border acquisitions made by Slovak companies in order to improve their performance. Authors applied the method of simultaneous equation model to examine this relation. The result confirmed the hypothesis that cross-border acquisitions positively influence a company performance.

Can the improvement of competitive adequacy and fairness reduce discriminatory M&A behavior?Evidence from the market access negative list pilot in China

Corporate mergers and acquisitions(M&As)are subject to skewed logic due to excessive government regulation.China is progressively adopting the Market Access Negative List(MANL)pilot to transfer the power of resource allocation from the government to the market.Using the DID method,we examine the impact of relaxing market access regulation on firms’M&A behavior against China’s institutional background and the M&A events of listed companies from 2012 to 2019.The MANL significantly increases firms’M&A tendency and amount and strengthens the competitive adequacy and fairness of market-oriented M&A decisions.Post-M&A financial performance does not increase,but human capital productivity,innovation effectiveness and total factor productivity do,demonstrating the dynamic balance of profit and efficiency in M&As.

Analysis of an improved acquisition method for high-dynamic BOC signal

To reach a compromise between short acquisition time and excellent detection probability for the high-dynamic binary offset carrier (BOC) signal, an overall algorithm based on discrete polynomial-phase transform (DPT) and partial matching filter (PMF)-fast Fourier transform (FFT) algorithm is given. The high order items of received signals are removed by the method of DPT, and the PMF-FFT algorithm is redesigned for the BOC signal. The simulation experiments and theoretical analyses verify that the improved algorithm has attained improvement in acquisition performance. © 2016 Beijing Institute of Aerospace Information.

Do M＆As Generate Value for Shareholders？ An Analysis of the Italian Banking Sector

The aim of this paper is to verify if the M＆As implemented in the past decade in the banking sector have created value for shareholders. For this purpose a sample of 72 deals carded out during the period of 1994-2005 were examined using the ＂event study＂ methodology. These deals were subdivided into three sections： acquisitions, mergers and M＆As. The results obtained seem to suggest a creation of value for the target companies and a destruction of value for the bidders in all three cases. From the analysis of the combined values, on the other hand, a significant destruction of value is deduced in both mergers and in M＆As.

New-Wave Emerging Multinational Companies： The Determinants of Their Outward Foreign Direct Investment

Focusing on the fast growth of BRICS＇ outward foreign direct investment （OFDI） and multinational companies during the crisis has left unheeded that some other emerging economies also grow much faster than average in the global economy and has become significant and fast-growing direct investors abroad. A sample of such （thirteen） new-wave emerging countries （NWECs） is gathered on the criterion of being ranked among the most significant foreign direct investors in the global economy. The literature review exhibits only very few articles existing on such a topic so far. Descriptive statistics enable tracing OFDI by NWECs-based multinational companies back to the 1970s, checking its geographical orientation and industrial structure, and assessing the relative importance of cross-border mergers and acquisitions. Econometric estimation exhibits that direct investment moving off the NWECs is explained by so-called push factors such as the home country＇s GDP, GDP per capita, GDP rate of growth, the share of high-technology exported products in overall export, the number of technological patents registered, and how much inward foreign direct investment discussed in the light of Dunning＇s investment development hypothesis. stock has previously been hosted. These results are path model and Matthews＇ linkage-leverage learning

Introducing Stakeholder-Based Frameworks for Post-merger Integration （PMI） Success

The importance of stakeholder relationship management for successful integration in post-merger management is not doubted. The establishment of a new powerful trend in investments produces strategic shifts in strategic management. Shareholder wealth maximization way of thinking is changing to stakeholder wealth maximization where a company＇s value management system is based not only on economic profit maximization, but also on environmental, social, and governance （ESG） maximization. There is especially a high need for a management system that can be used by mergers and acquisitions （M＆A） practitioners during integration process. There is a critical need for metrics which can trace the interests of all stakeholders, because to achieve success in integration, it is no longer acceptable for management to focus solely on the needs of one or two stakeholder groups. In this article, the authors have introduced two frameworks： sun cube and stakeholder relationship matrix. These tools can be useful in mergers and acquisitions （M＆A） process for conducting a stakeholder analysis.

The determinants of shareholders＇ wealth of acquiring firms in India

Corporate restructuring has become a major component in the financial and economic environment all over the world. Industrial restructuring has raised important issues for business decisions as well as for public policy formulation. Since 1991, Indian industries have been increasingly exposed to both domestic and international competition and competitiveness. The companies started restructuring there operations around their core business there M ＆ A. But M ＆ A is an area of potential good and harm in corporate strategy including manufacturing industry. Therefore, an attempt has been made to analyze the security returns and to find out the net wealth increase or decrease to the shareholders of acquiring firms. In India, there are totally 58 manufacturing companies which have undergone mergers and acquisitions during 2000, 2001 ＆ 2002. Thirty percentage from the total population was taken as sample size （i.e., 17 companies out of 58）. The present study is mainly based on secondary data. The Market Model and Market Adjusted Returns Model analysis are used as tools of analysis.

CROSS-BORDER MERGER AND ACQUISITION OF CHINESE DOMESTIC LISTED COMPANIES

China＇s reform of state-owned enterprises （SOEs） and share trading plays an essential role in cross-border mergers and acquisitions （M＆A）. Considering most of the public listed companies enjoying abundant domestic resources as an outcome of SOEs reform, as well as the new capital and innovative managerial conceptions that foreign M＆A brings in, the SOEs and share-trading reforms are undoubtedly mutually beneficial. As the reforms deepen, rules are established that state-owned shares cannot be traded, given potential loss of state-owned assets, which creates a great plight tbr foreign M＆A through directly purchasing tradable shares within China＇s A share market. Therefore, share-trading reform progressed so as to convert non-tradable shares to tradable ones, which indeed provides many opportunities for foreign M＆A. This article adopts case study and related empirical analysis methods. After systematic research on the cases of foreign M＆A of listed companies in China that were transacted between 1995 and November 2012, and analyzing each respectively under the framework of the existing sixteen models in China, those models can be further classified into three categories concerning the unique share structure as well as the legal environment in China.

The Evolving Economic Role of Accounting Standards： Evidence from Bilateral Cross-Border M＆A Flows

Cross-border M＆As are important to the participating countries. I posit that mandatory International Financial Reporting Standards （IFRS） adoption lowers the systemic information noise embedded in countries＇ accounting standards. This reduces the associated information processing costs and enhances the economic role accounting standards play on cross-border M＆A flows. After mandatory IFRS adoption, a 1% increase in accounting standards disparity suppresses bilateral M＆A flows by around 2%; a decrease in accounting standards disparity helps promote bilateral M＆A flows when paired countries＇ governance infrastructure gaps are relatively wider. I do not find that these associations were significant prior to mandatory IFRS adoption. Overall, this paper documents an evolving economic role accounting standards play on bilateral cross-border M＆A flows and sheds light on the economic benefits of adopting IFRS for policy makers.