Title: Stock market response to mergers and acquisitions: comparison between China and India

Authors: Jianyu Ma; Yun Chu

Addresses: Rockwell School of Business, Robert Morris University – Pittsburgh, 6001 University Boulevard, Moon Township, PA 15108-1189, USA ' Rockwell School of Business, Robert Morris University – Pittsburgh, 6001 University Boulevard, Moon Township, PA 15108-1189, USA

Abstract: This research delves into the wealth effect of shareholders from bidding firms created by mergers and acquisitions (M&A) in China and India, two of the world's most populous nations. The study reveals that on average, M&A deals create wealth for shareholders of the acquiring firms, as determined by abnormal percentage returns in a five-day event window. Regarding the further classification of acquiring firms based on industry, the abnormal percentage returns vary in different sectors in both countries. In China, shareholders benefit in seven out of ten industries, while in India, they gain in five out of nine industries. Moreover, the stock markets' responses vary depending on the type of M&A in each country. Cross-industry M&A deals in China generate higher gains for shareholders than within-industry deals, whereas, in India, within-industry M&A deals generate higher gains.

Keywords: mergers; acquisitions; abnormal return; within-industry M&A; cross-industry M&A; India; China; market response; industry comparison; stock market.

DOI: 10.1504/IJBSR.2024.142055

International Journal of Business and Systems Research, 2024 Vol.18 No.6, pp.555 - 568

Received: 25 Feb 2024
Accepted: 29 Mar 2024
Published online: 07 Oct 2024 *

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