Firm performance, asset acquisition and the method of controlling rights transfer: Evidence from the Chinese market
Document Type
Article
Date of Original Version
1-1-2008
Abstract
The transfer of controlling rights for a Chinese public company is either a free transfer or an agreed sale. We show that good-performing firms are more likely to be transferred to new owners for free while poor-performing firms are more likely to be sold via agreed sales. Furthermore, we find that demands for these poor-performing companies come from new owners who can subsequently engage in profitable asset acquisitions. In addition, firms that are transferred through agreed sales extract higher returns through subsequent asset acquisitions than firms that are tendered through free transfers. © 2006 Elsevier Inc. All rights reserved.
Publication Title, e.g., Journal
International Review of Economics and Finance
Volume
17
Issue
1
Citation/Publisher Attribution
Bai, Yunxia, Shaw K. Chen, Bing Xuan Lin, and Liansheng Wu. "Firm performance, asset acquisition and the method of controlling rights transfer: Evidence from the Chinese market." International Review of Economics and Finance 17, 1 (2008): 138-149. doi: 10.1016/j.iref.2006.05.003.