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

This 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.