The first global merger wave and the enigma of Chinese performance

Kilian McCarthy, W.A. Dolfsma, Utz Weitzel

    Research output: Contribution to journalArticleAcademicpeer-review

    Abstract

    The first five merger waves were US-led events. In this article we show that the largely over-looked sixth wave (2003–2008) emerged in all regions simultaneously. Because of this, and building upon interconnected literatures – which: (1) suggests that agency is a big predictor of merger performance; (2) distinguishes between three distinct governance traditions; and (3) argues that the Anglo-Saxon system puts the most effort into protecting investors and aligning interests, and the Confucian system the least – we predicted that Anglo-Saxon acquirers would create value in the sixth wave, and Confucian acquirers would destroy it. We find the opposite to be true and show that Chinese acquirers, in particular, created the most value in the sixth wave. In attempting to explain why, we find that China outperformed its Asian neighbors while doing the same thing, and outperformed its Western peers while doing what the literature suggests that they shouldn’t do. This not only points to the limits of the generalizability of the existing literature, but supports the suggestion that Chinese acquirers are ‘different’. We call, therefore, for additional research into understanding Chinese and Confucian acquirers using the standard comparative merger data.
    Original languageEnglish
    Pages (from-to)221-248
    Number of pages28
    JournalManagement and Organization Review
    Volume12
    Issue number2
    DOIs
    Publication statusPublished - 2016

    Keywords

    • Asian mergers
    • Merger performance
    • Mergers and acquisitions
    • Sixth wave

    Fingerprint

    Dive into the research topics of 'The first global merger wave and the enigma of Chinese performance'. Together they form a unique fingerprint.

    Cite this