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| Risk Conception, Premiums Paid by Acquirer, and Completion of Merger and Acquisition |
| WEN Riguang
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| Guanghua School of Management,Peking University |
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Abstract This paper explores the impact of national risk conception on pricing and completion of merger and acquisition (M&A). Our sample consists of M&A deals whose acquirers are Chinese enterprises. We use power distance, uncertainty avoidance and collectivism respectively to proxy for national risk avoidance. The empirical results show that power distance, uncertainty avoidance, collectivism of target’s nation and overall risk avoidance all correlates negatively to premium paid by acquirer and positively to completion of M&A, both statistically significant. In addition, mediation analyses show that premium paid by acquirer mediates the relationship between power distance, uncertainty avoidance, collectivism and overall risk avoidance of target’s nation and completion of M&A. Chinese enterprise that are prepare to merge or acquire other enterprises are enlighten by these results that target’s national risk avoidance should be took into consideration when they make their decisions.
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Received: 19 August 2014
Published: 19 April 2018
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