Who Engages in Mergers and Acquisitions: Evidence from Chinese Listed Companies

Ihis paper use theories such as agency, management efficiency, and market power to explain the motive and performance of mergers and acquisitions by a cross-sectional logistic regression model, the feature indexes, and cumulative abnormal returns. The results show that the acquirers have significantly lower asset-liability ratio compared to the listed firms without takeover transactions, and firms with better profitability are more likely to execute a takeover transaction. The results also indicate that an increase in market value of acquirers, return on equity, and being overvalued could increase a firm's likelihood of acquiring because of high level of management or low agency costs. Increase in asset-liability ratio declines the possibility of acquire because of financial constraints and financial risk.