Research On The Effect Of Host-country’s Economic Policy Uncertainty On Cross-border Merger And Acquisition Performance Of Chinese Enterprises

Cross-border merger and acquisition(cross-border M&A)can bypass trade barriers,quickly acquire resources from overseas countries,learn know-how technologies,and increase market share.Since 2008,China’s cross-border mergers and acquisitions(cross-border M&As)have intensified.In 2016,the scale of cross-border M&A reached 135.33 billion US dollars,however,less than 20% of cross-border M&A deals were truly successful.Although economic globalization has brought about the growth of the global economy,with the rise of unilateralism and trade protectionism,the tide of anti-globalization is rising,and non-traditional security threats such as climate change and hacker are also increasing day by day,cross-border M&As are in an uncertainty environment.Especially,after the China-United States trade war and the COVID-19,world economy growth slower and relevant economic policies such as foreigninvested and cross-border M&A have been affected,China’s cross-border M&A descended.How to improve the performance of cross-border M&A under such an environment of economic policy uncertainty is more important.Based on real option theory,information asymmetry theory and principal-agent theory,the thesis selects the overseas mergers and acquisitions events of A-share listed companies from2004 to 2019,constructs fixed effect model,and explores how host-countries’ economic policy uncertainty effect cross-border M&As performances.Because of shareholder and executive has great influences on company performance,moderating variable ownership structure(ownership concentration and separation)and executive incentive mode indexes(executive monetary compensation and share-based incentives)are added to study how they moderate the mechanism between host-country’s economic policy uncertainty and performance of cross-border M&A in China.The empirical results show that: host-country’s economic policy uncertainty is negatively correlated with the performance of cross-border M&A;a high degree of equity restriction which means a relatively balanced equality distribution reduces above inhibition.As a comparison,equity concentration that means stock rights centralizes on the first majority shareholder will increase above inhibition.High executive shareholding will strengthen the inhibition and executive monetary compensation incentives can reduce it.From the perspective of macroeconomic policy uncertainty of the host country,this thesis studies its impact on the performance of cross-border M&A,enriching the research on the influencing factors of cross-border M&A performance and proposing a new path to improve its performance.In addition,starting from the ownership structure and executive incentives,the thesis proposes specific and feasible countermeasures and suggestions to maximize the performance of cross-border M&A of enterprises in the environment of economic policy uncertainty.Firstly,enterprises should avoid investing in countries with high economic policy uncertainty as much as possible;secondly,reduce the information asymmetry with the acquired party with the help of national resources;decentralize properly to supervise each other and reduce personal self-interest behavior;Finally,reduce the executives’ stock to reduce blind decision-making behavior and improve the performance of cross-border M&A.The thesis has 4 figures,22 tables,and 90 references.