Study On The Influence Of Tax Policy Uncertainty Of Host Country On The Success Or Failure Of Transnational M&A

In recent years,under the influence of COVID-19,geopolitical conflicts and other factors,the uncertainty of global investment environment has increased,and countries frequently adjust their tax policies to stimulate their own economic development.The uncertainty risk caused by tax policy changes has become a hot topic for scholars to study.The frequent adjustment of tax policy in host country makes the market information asymmetry more serious,it is more difficult for Chinese enterprises to obtain key information for cross-border investment,and enterprises may have deviation in understanding the tax policy adjusted in host country.Therefore,the change of tax policy in host country becomes one of the factors affecting the cross-border investment of Chinese enterprises.In 2022,China’s outbound direct investment reached US $146.5 billion,making China one of the world’s top countries in terms of outbound direct investment.However,as a major way of OFDI,according to the Financial Times,more than 75 billion US dollars worth of M&A deals were cancelled in China in 2016.The problem of high failure rate has always existed in the development process of China’s cross-border M&A,and the reasons have gradually attracted the attention of scholars.Although existing studies have analyzed the reasons for the success or failure of transnational M&A from the perspectives of institutional distance,cultural distance,geographical distance,economic distance,enterprise ownership form,enterprise M&A experience,management’s overseas experience,corporate reputation,corporate social responsibility,etc.,few literatures have studied the impact of host country tax policy uncertainty on the success or failure of transnational M&A of Chinese enterprises.In this paper,A-share listed companies in Shanghai and Shenzhen from 2011 to 2019 were selected as samples for empirical research,and multiple regression analysis was conducted on the research hypothesis,moderating effect and heterogeneity analysis.The results show that:(1)the increase of tax policy uncertainty in host country has a significant inhibitory effect on the success of transnational M&A of Chinese enterprises;(2)The business environment of the host country can strengthen the inhibitory effect of tax policy uncertainty on the success of transnational M&A,while professional financial advisers and the nature of state-owned enterprises can effectively alleviate the significant inhibitory effect of tax policy uncertainty of the host country on the success of transnational M&A.(3)When enterprises invest in the host country with bilateral investment treaty,tax policy uncertainty is more sensitive to the inhibition effect of transnational M&A success,and when enterprises invest in sensitive industries,they are more sensitive to the inhibition effect of tax policy uncertainty on transnational M&A success.The study of this paper has enriched the empirical research on the factors affecting the success or failure of cross-border M&A at the macro level to a certain extent.Meanwhile,the research results show that the uncertainty of the tax policy of the host country has an important impact on the success or failure of cross-border M&A,which provides a basis for improving the transparency of tax policy and improving the information sharing mechanism.To improve the success rate of cross-border mergers and acquisitions of Chinese enterprises to provide decision-making reference.