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CUFE-BS Academic Seminar: The Liability of Opaqueness: StateOwnership and the Likelihood of Deal Completion in International Acquisitions
Date :2019-06-05Click :

Time:2019.06.11,1:30-3:00 PM


Location:Room 615, Main Building


KeynoteSpeaker:ProfessorJT Li, HKUST  


Abstract:State-ownedenterprises (SOEs) are often less transparent and have more complexorganizational structures than other types of firms. This opaqueness tends togenerate political resistance when SOEs undertake cross-border acquisitions.Data on attempted foreign acquisitions by Chinese firms were analyzed tocompare the likelihood of deal completion between SOEs and firms with otherforms of ownership. The SOEs’ completion rate was 14% lower than that of otherfirms. Their disadvantage was shown to be less when they could provide crediblesignals by being publicly–listed (though only on an exchange in a well-developed economy andwhen they hired reputable auditors), having a better past record and hiringrespected financial advisors. Overall, the evidence confirms that Chinese SOEsface greater resistance than other Chinese firms in international acquisitions,and their opaqueness aggravates the resistance.




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