Abstract | In recent years, China's overseas M&As have been flourished and have become an effective for acquiring strategic assets and enhancing international competitiveness.Studying the industry distribution pattern of Chinese overseas M&As is of great significance to better promote the implementation of the "going out" strategy and the economic transformation and upgrading under the new normal conditions. However, only a few scholars have conducted relevant research on China's overseas M&As from industry level at present. Meanwhile, there has been no literature exploring China’s M&As from the perspective of comparative advantage which has always been an important guiding principle in international trade and investment.Then, as a developing country, what are the characteristics and trends of China's overseas M&As in industry selection? What are the special rules? What are the motivations for M&As in specific industry? Whether China's overseas M&As have followed the principles of comparative advantage and synergistic effects as the developed countries in industry selection and location distribution?
Based on gravity model, this paper systematically examines the distribution characteristics of China's overseas M&As from the perspective of home and host country industry-specific comparative advantage from 1992 to 2014. Our general findings are that China’s overseas M&As is prone to target industries with higher availability of good assets and acquiring firms operate in industries with comparative advantages as well. Furthermore, in the specific industry selection of a specific host country, acquiring firms in industries with a higher comparative advantage are more likely to target countries with weaker industry-specific comparative advantages,and vice versa. Findings of this paper shows significant implications. First, although encountered obstacles and received many criticisms, China's overseas M&As are guided by the principle of comparative advantage. Second,rather than simple scale expansion, China's overseas M&As pay great attention to the complementary advantages between domestic and target industries in accordance with the pursuit of synergy principle.
As compared with the prior studies,contributions of this paper are as follows. First, we argue that greenfield investment and cross-border M&As are, in fact, two different forms of investment.This paper focuses on the analysis of overseas M&As from the perspective of home and host country comparative advantages, which provides a new angle for the explanation of overseas M&As behavior in China.To the best of our knowledge, this paper is probably the first study discussing Chinese overseas M&As based on industrial comparative advantage. Second, differed from the prior studies considering only acquiring industry characteristics, this paper studies both home and host industry characteristics, and fully considers the host country location characteristics which provides new insights into industry selection and location distribution of China's overseas M&As. Third,the industry level study of China's overseas M&As will provide experiences for the developing countries in industry and location distribution patterns.
The research is the first study discussing industry distribution of Chinese overseas M&As from the perspective of comparative advantage, which has both theoretical and realistic significance.We find that in line with the developed countries,China's overseas M&As are also guided by the principle of comparative advantage which has a realistic significance in responding to various criticisms encountered in the process of Chinese overseas M&As. At the same time, China's overseas M&As also conform to economic law from the angle of pursuing synergy. The research conclusions have some policy implications for assessment of the achievements and lessons of China’s overseas M&As in the context of large-scale “going out”.
|