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| Competitive Advantage, Asset Price and China’s Overseas M&A |
| XIE Hongjun, JIANG Dianchun
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| School of Economics, Nankai University |
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Abstract For the recent rapid growth in China’s overseas mergers and acquisitions(M&A) , mainstream opinions believe it’s driven by the growing international competitiveness of Chinese firms, namely “competitive advantage hypothesis”. However, the traditional “competitive advantage hypothesis” cannot explain numerous stylized facts of China’s overseas M&A. To figure out the reasons behind the violation of the stylized facts and to discover the driven factors behind China’s M&A, this paper argues that we can not ignore the crucial role played by the domestic and foreign asset price, After illustrating the“price hypothesis”thoroughly and using the country-industry-year level data, we test the two different theoretical hypotheses discussed above. Results find no evidence supporting the“competitive advantage hypothesis”, but confirm the“price hypothesis”.We further prove our views by mechanism analysis and robustness check.
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Received: 12 September 2016
Published: 18 January 2018
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