Title: What influence the choice of host country in Chinese firm cross-border M&As on culture distance, institution and tax

Authors: Xiangfei Fu; Yongmei Cui; Vicenc Fernandez; Yan Zhao

Addresses: School of Economics and Management, Beijing Jiaotong University, 100044, Beijing, China; Universitat Politècnica de Catalunya, BarcelonaTech, 100044, Barcelona, Spain ' School of Economics and Management, Beijing Jiaotong University, 100044, Beijing, China ' Universitat Politècnica de Catalunya, BarcelonaTech, 100044, Barcelona, Spain ' School of Economics and Management, Beijing Jiaotong University, 100044, Beijing, China

Abstract: What influence the choice of host country when Chinese firm make cross-border merger and acquisitions (M&A)? According to 1,051 Chinese cross-border M&A transactions in the years 2000-2015 listed in BVD-Zephyr database, we find that culture distance, institution and tax are the three most significant factors: 1) Chinese firms are more likely to choose host country with close culture when conduct cross-border M&As. 2) Chinese firms tend to choose M&A method to enter countries that have stronger institutions. Among the six specific institution factors (control of corruption, government effectiveness, political stability, regulatory quality, rule of law, voice and accountability), Chinese firms care more about control of corruption, government effectiveness, political stability and regulatory quality. 3) Low-tax countries are more attractive to Chinese firm cross-border M&As.

Keywords: cross-border merger and acquisition; culture distance; institution and tax.

DOI: 10.1504/IJSTM.2018.090357

International Journal of Services Technology and Management, 2018 Vol.24 No.1/2/3, pp.195 - 207

Received: 16 Nov 2016
Accepted: 22 May 2017
Published online: 13 Mar 2018 *

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