SOE Involvement,Difference in Regional System and M&A Process—From the Legitimacy Perspective
Based on the legitimacy perspective,this study employs domestic merger and acquisition(M&A)events of China's A-share listed companies from 2000 to 2019 to examine the effect of state-owned enterprise(SOE)involvement on the success rate and comple-tion time of domestic M&As,as well as the moderating effect of regional institutional difference.Empirical results show that on the one hand,domestic M&As with SOE involvement have an advantage in gaining legitimacy and hence a higher success rate,but on the other hand,such M&As take a longer time to complete because of SOE's rigorous decision-making and strict investigation process.Further-more,the positive effect of SOE involvement on the success rate a M&A transaction is more significant when the two sides of the transac-tion operate under distinctly different regional systems,which is an indirect reflection of SOE's unique role in bridging differences in re-gional systems.Taking the level of SOEs into account,we find that both central SOEs and local SOEs can improve the success rate of M&A,and the effect of central SOEs is greater.Moreover,local SOE involvement will prolong the M&A process,but central SOE in-volvement will not.This study not only provides a new perspective for understanding domestic M&A process that involves SOEs,but also enriches the legitimacy management literature.
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