The Impact Of Cross-listing On The Performance Of Cross-border Mergers And Acquisitions

In recent years,more and more Chinese listed companies have gone abroad to complete cross-listing in Hong Kong,London,New York and other foreign stock exchanges,thereby alleviating the financing pressure,increasing the liquidity of stocks,reducing the financing costs and improving the corporate governance.And cross-border M&A is a major strategic choice for companies to achieve the scale expansion after the cross-listing.Some research shows that cross-border mergers and acquisitions activities are more active after cross-listing.Therefore,this paper mainly studies the performance of cross-border mergers and acquisitions from the perspective of cross-listing.Based on the sample of 162 cross-border M&A cases of A-share listed companies from 2008 to 2014,this paper studies the impact of A+H cross-listing on the short-term and long-term performance of cross-border M&As.The event study method is adopted for measuring performance,the short-term performance uses the CAR model to estimate the cumulative abnormal return rate before and after the first announcement date of the cross-border M&A event,and the long-term performance uses the BHAR model to estimate the continuous abnormal return rate within three years after cross-border M&A.Empirical test results show that the short-term performance(CAR)of cross-border M&A is significantly positively correlated with cross-listing,but the cross-listing does not promote the improvement of long-term performance(BHAR).This paper suggests that in the short term,cross-listing reduces the asymmetry of information between the both sides of M&A and sends a positive signal to the market,which can boost investor confidence,then promote the rise of stock price,create wealth for shareholder.However,in the long term,cross-listing cannot improve the performance because of the over-investment behavior.This paper not only enriches the theoretical connection between the cross-listing and cross-border M&A,but also provides a reference for Chinese enterprises to carry out crossborder M&A and the government to formulate relevant policies.