Does State Ownership Drive M&A Performance? Evidence from China


  • Comments received throughout the formulation of this work are gratefully acknowledged. Special thanks go to John Doukas, two anonymous referees as well as the participants of the 2011 EFMA Asian Financial Management Symposium for valuable comments and suggestions received throughout this work. Correspondence: Jie (Michael) Guo.


This paper examines the role of state ownership in mergers and acquisitions by analysing the short- and long-term performance of Chinese state-owned enterprise (SOE) acquirers relative to privately owned enterprise (POE) peers from 1994 to 2008. The empirical results show that SOE acquirers outperform POE acquirers in terms of long-run stock performance and operating performance. In addition, consistent with previous literature, our results suggest that the gains from government intervention outweigh the inefficiency of state ownership in Chinese mergers and acquisitions.