Ownership and M&A Performance in a Transitional Economy: The Case of the Chinese Real Estate Industry

• DOI: 10.1017/mor.2015.30
• Publication Date: 2015-10-05T07:53:17Z
• Authors: Hongyan Yang; Jing Ru; Ting Ren
• Keywords: Marketization; Chinese economy; Disadvantaged

ABSTRACT In a transitional economy such as China's, when resources are unevenly distributed across different sectors, the disadvantaged sector may seek growth path that bypasses resource constraints. We investigated this phenomenon in context of Chinese real estate industry. By comparing post–merger and acquisition (M&A) performance acquiring firms between state-owned enterprises (SOEs) privately-owned (POEs), we attempted to show POEs better performers market should they be granted equitable resources, superior is strengthened by market-oriented institutional environment. used M&A events data publicly listed China from 2004 2012, conjunction with firm characteristics province-level environment data. found results consistent our hypotheses. particular, compared SOEs, tend have post-M&A both regions acquirer target high level marketization. The suggest private China's potentially more efficient than sector, long favorable.