Internal capital market mergers in weak external market environment: An emerging market evidence

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dc.check.date2021-07-31
dc.check.infoAccess to this article is restricted until 24 months after publication by request of the publisheren
dc.contributor.authorHuang, Wei
dc.contributor.authorZhang, Hong
dc.contributor.authorGoyal, Abhinav
dc.contributor.authorLaws, Jason
dc.date.accessioned2020-01-22T12:14:42Z
dc.date.available2020-01-22T12:14:42Z
dc.date.issued2019-07-31
dc.date.updated2020-01-22T12:00:25Z
dc.description.abstractUsing Chinese split‐share structure reform as backdrop, we study the alternative theories explaining the change in objectives of internal capital markets (ICMs) after regulatory intervention. Focusing on related party merger and acquisitions, as the primary form of ICM transactions in China, we document significantly positive performance improvement among the acquiring firms around related party than nonrelated party merger and acquisitions in the period following the split‐share structure reform. This evidence is particularly stronger among acquirers with lower institutional shareholding. Our findings are invariant to the length of performance evaluation window, matched samples, model specifications, acquirers' ownership structure, and business group affiliations. After controlling for alternative channels of tunnelling and propping, contrary to the popular belief, our findings support the bright‐side view of ICMs postregulatory intervention in an emerging market set‐up.en
dc.description.statusPeer revieweden
dc.description.versionAccepted Versionen
dc.format.mimetypeapplication/pdfen
dc.identifier.citationHuang, W., Zhang, H., Goyal, A. and Laws, J. (2019) 'Internal capital market mergers in weak external market environment: An emerging market evidence', International Journal of Finance & Economics, 24(4), pp. 1486-1505. doi: 10.1002/ijfe.1739en
dc.identifier.doi10.1002/ijfe.1739en
dc.identifier.endpage1505en
dc.identifier.issn1076-9307
dc.identifier.issued4en
dc.identifier.journaltitleInternational Journal of Finance and Economicsen
dc.identifier.startpage1486en
dc.identifier.urihttps://hdl.handle.net/10468/9553
dc.identifier.volume24en
dc.language.isoenen
dc.publisherWileyen
dc.relation.urihttps://onlinelibrary.wiley.com/doi/abs/10.1002/ijfe.1739
dc.rights© 2019 John Wiley & Sons, Ltd. This is the peer reviewed version of the following article: Huang, W, Zhang, H, Goyal, A, Laws, J. Internal capital market mergers in weak external market environment: An emerging market evidence. Int J Fin Econ. 2019; 24: 1486– 1505, which has been published in final form at https://doi.org/10.1002/ijfe.1739 This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.en
dc.subjectChinaen
dc.subjectInternal capital marketen
dc.subjectM&Aen
dc.subjectRelated partyen
dc.subjectTunnellingen
dc.titleInternal capital market mergers in weak external market environment: An emerging market evidenceen
dc.typeArticle (peer-reviewed)en
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