Foreign Investment Screening Mechanisms in Host Country and Chinese enterprises' cross-border M&A
In recent years,some economies have revised and strengthened the foreign investment review mechanism on the grounds of national security,which has brought new and severe challenges to the cross-border M&A activities of Chinese enterprises.Based on the micro data of Chinese enterpri-ses'overseas M&A from 2007 to 2021 and PRISM data constructed by Danzman and Meunier in 2023,this paper examines the impact of foreign in-vestment review mechanismforeign investment security review system in host countries on Chinese enterprises'overseas M&A.The empirical results show that,firstly,the foreign investment security review mechanism of the host country significantly inhibits the scale of Chinese enterprises'China's overseas M&A,which is still valid after considering a series of factors that may interfere with the estimation results.Secondly,the results show that the foreign investment review mechanism of host country will inhibit Chinese enterprises'cross-border M&A through three channels:in-creasing transaction cost,increasing M&A uncertainty,and indirect deterrence The mechanism test finds that in addition to influencing cross-border M&A through transaction cost and uncertainty,security review will also reduce the completion rate of M&A and have an indirect deterrent effect on Chinese enterprises'overseas M&A.Thirdly,heterogeneity analysis shows that the foreign investment review mechanism has a more significant in-hibitory effect on Chinese enterprises'cross-border M&A in cross-sector review,low review threshold,EU countries and US,and high-tech industri-esThe inhibitory effect of foreign capital review mechanism on overseas M&A is heterogeneous.
万方数据
维普
