Title: The effect of mergers and acquisitions announcements on shareholder value of Chinese logistics companies
Authors: Weihua Liu; Cheng Si; Xiaosong Peng
Addresses: College of Management and Economics, Tianjin University, No. 92, Weijin Road, Nankai District, Tianjin, 300072, China ' College of Management and Economics, Tianjin University, No. 92, Weijin Road, Nankai District, Tianjin, 300072, China ' Department of Decision and Information Sciences, C.T. Bauer College of Business, University of Houston, 4750 Callhoun Road, Room 334, Houston, TX77204-6021, USA
Abstract: This paper studies the effect of M&A announcements on shareholder value of listed companies from Chinese logistics industry. Using event study method, this research examines the market reaction to 181 initial announcements of successful M&As between 2000 and 2016. Some important findings are obtained. Firstly, we find a significantly positive mean market reaction (1.125%) to successful M&As for acquiring firms. Secondly, the market reaction is more positive for firms with a higher level of logistics service integration. The higher the logistics subsector concentration, the higher the abnormal returns. The market reaction to mergers involving the vertical integration of logistics service is more positive than those involving the horizontal integration of logistics service. Finally, the post hoc analysis finds that the market reacts negatively to failed M&As (−1.53%).
Keywords: M&A announcement; stock market reaction; China's logistics industry; post hoc analysis; event study.
International Journal of Shipping and Transport Logistics, 2020 Vol.12 No.4, pp.340 - 366
Received: 30 Sep 2018
Accepted: 22 Feb 2019
Published online: 16 Jun 2020 *