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Title: Chinese pharmaceuticals: does sub-national marketisation matter? Evidence of cross-province acquisitions by Guangdong pharmaceutical firms

Authors: Manli Huang; Huiru Zhang; Antonio Angelino

Addresses: School of Business Administration, South China University of Technology, Research Center for Chinese Enterprise Strategic Management, SCUT, China; School of Business Administration, South China University of Technology, Wushan Road 381, Guangzhou 510641, China ' Research Center for Chinese Enterprise Strategic Management, SCUT, China; School of Business Administration, South China University of Technology, Wushan Road 381, Guangzhou 510641, China ' Department of Economics and Management, University of Ferrara, 44121,Via Voltapaletto 11, Ferrara, Italy

Abstract: This article assesses the influence of sub-national marketisation on the equity share choice in mergers and acquisitions. Focusing on domestic acquisitions, we examine the relationship between marketisation of the target firm and the acquirer firm's equity share choice by Guangdong (GD) firms in pharmaceuticals. Our sample consists of 53 domestic acquisitions in China of which acquirers are located in GD province and targets are located all over China. Findings confirm that differences exist in equity share choice based on different sub-national marketisation within China. Sub-national marketisation has significant association with equity share in cross-province acquisitions. An acquirer will more likely opt for partial shares in the acquired firm than full shares when acquiring a firm across provinces.

Keywords: sub-national marketisation; merger and acquisitions; equity share; pharmaceuticals; China.

DOI: 10.1504/IJHTM.2017.087596

International Journal of Healthcare Technology and Management, 2017 Vol.16 No.1/2, pp.95 - 107

Received: 04 Mar 2016
Accepted: 27 Feb 2017

Published online: 17 Oct 2017 *

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