儒家文化圈與中國企業海外併購

Abstract

The development of mergers and acquisitions (M&A in short) is quite fast; The world has experienced six waves of M&A until now. From the fifth wave of M&A, cross-border M&A starts to become popular and develops rapidly in terms of both transaction volume and transaction amount. As the world’s most populous country and the largest economy in the developing world, China is naturally playing a major role in the cross-border M&A wave. From the moment that Deng Xiaoping clearly proposed to “actively expand the foreign investment and transnational operations of Chinese enterprises” in the 14th National Congress of the Communist Party of China in 1992, to the moment that China joined the World Trade Organization (WTO), and to the moment that General Secretary Xi Jinping successively proposed the “Silk Road Economic Belt” and the “21st Century Maritime Silk Road” (“ One Belt and One Road” for short), China’s activities of opening up, foreign investment, foreign trade and foreign development have been making steady progress all the time, and gradually forming the "going-out" strategy which encourages Chinese enterprises to go abroad, towards the world and stand in the international stage. Also, the Chinese government provides a series of fiscal and tax incentives for the effective implementation of the “going-out” strategy. It is in such a background that well encouraged by the state and the government that Chinese enterprises' overseas M&A activities are beginning to increase, and the amount of overseas M&A transactions is also growing, for example, In July 2017, China COSCO Holdings Company Limited acquired 98.43% of Hong Kong's Orient Overseas Container Line LTD. for 49.23 billion Hong Kong dollars. Chinese enterprises' overseas M&A transaction volume increased by nearly 150% in 2016.

Conceptually speaking, the motives of overseas M&A and domestic M&A are the same, that is, if the managers of acquiror company believe that the value or the effect will increase afterwards the merger of the two companies, then the two companies will merge. However, geographical distances and cultural differences add the additional factors which will hinder the occurrence of overseas M&A activities. These factors are likely to affect the negotiation process of Chinese enterprises' overseas M&A, and further affect the success or failure of M&A, as well as the costs paid by Chinese enterprises in the overseas M&A and also affect the integration effect and performance of enterprises after M&A. Chinese culture has always been based on Confucianism which strongly emphasizes hierarchical concepts, relationship and collectivism. While Western culture pays more attention to individualism, egoism, equality and independence, which is very different from Confucian culture. Although Confucianism originated in China, developed and prevailed in China, Confucianism is also radiated to other countries (or regions) other than mainland China due to some historical reasons, namely the Confucian cultural circle countries (or regions). These Confucian cultural circle countries (or regions) also respect Confucianism and pay great attention to hierarchical concepts, collectivism and relationship. So when Chinese enterprises conduct overseas M&A activities, will it make a difference whether the potential target countries are Confucian cultural circle countries (or regions) or not? In order to explore this question, this paper intends to use both empirical test and case analysis to study the overseas M&A activities of Chinese enterprises from the perspective of the Confucian cultural circle.

First of all, there are a large number of relevant literatures about M&A, overseas M&A and Confucianism, this paper combs the relevant literatures from this three aspects, reviews the development history of Chinese enterprises’ overseas M&A, and also analyzes the current situation of Chinese enterprises’ overseas M&A. Then this paper adopts the regression model to conduct empirical research to examine the influence of Confucian cultural circle, market, resources, asset and institution on the location choice and investment scale of Chinese enterprises' overseas M&A. Based on this, this paper further adds the interaction of the Confucian cultural circle and geographic distance, whether target firms are from developed countries (or regions) , whether both sides signed a bilateral trade agreement in the regression, to explore the different effects of Confucian cultural circle in different situations. Finally, based on the current situation of Chinese enterprises' overseas M&A, theoretical analysis and the results of empirical test, this paper concludes and puts forward constructive suggestions for the development of Chinese enterprises' overseas M&A activities.

In this paper, data of overseas M&A of Chinese enterprises from 2001 to 2017 were selected from Thomson financial M&A database (SDC) and World Bank data, involving 146 countries and regions, including 12 countries and regions in the Confucian cultural circle. Based on this, this paper discusses the influence of Confucian cultural circle on the location choice and investment scale of Chinese enterprises' overseas M&A.

As for empirical test, we know that the factors affecting cross-border M&A mainly include market, natural resources, strategic asset and institution environment after reading a large number of literatures. Therefore, this paper takes market, natural resources, strategic asset and institution environment as the core control variable and explores the influence of Confucian cultural circle on the location choice and investment scale of Chinese enterprises' overseas M&A based on this. And then we obtain the following empirical results: Chinese enterprises are more likely to choose Confucian culture circle countries (or regions) as their M&A target countries (or regions), and at the same time invest more in Confucian culture circle countries (or regions). From the perspective of the market, market size and purchasing power do influence the overseas M&A of Chinese enterprises. Among them, GDP has the most significant positive effect on the location choice and investment scale of Chinese enterprises’ overseas M&A, followed by per capita GDP, while the effect of GDP growth rate is not significant. From the perspective of natural resources, mineral and metal resources have a significant positive impact on the location choice and investment scale of Chinese enterprises’ overseas M&A. From the perspective of strategic assets, strategic assets have no significant impact on the location choice and investment scale of Chinese enterprises' overseas M&A. In terms of institutional environment, the stability of the government, law and order, and the degree of integrity have significant positive effects on the location choice and investment scale of Chinese enterprises in overseas M&A.

In the further research, this paper further analyzes the different effects of Confucian cultural circle in different situations, so we add the interaction of the Confucian cultural circle and geographic distance, whether target firms are from developed countries (or regions) , whether both sides signed a bilateral trade agreement in the regression, to explore the different effects of Confucian cultural circle. The research finds that: the farther geographical distance, the weaker influence of Confucian cultural circle on the overseas M&A investment scale of Chinese enterprises; However, geographical distance has no significant moderating effect on “the influence of Confucian cultural circle on the location choice of Chinese enterprises’ overseas M&A”. Meanwhile, there is no significant difference in the influence of Confucian cultural circle on the location choice of Chinese enterprises’ overseas M&A between developed countries (or regions) and developing countries (or regions). But in developed countries (or regions), Confucian cultural circle has a greater impact on investment scale, indicating that there is a broader market in the developed countries (or regions), making Chinese enterprises have more incentives to expand investment scale. Finally, the existence of “bilateral trade agreements” will weaken the “influence of Confucian cultural circle on Chinese overseas M&A”, and to some extent, it replaces the cultural convenience brought by Confucian cultural circle through providing legal protection.

On the basis of above test, this paper further makes robustness tests from the perspectives of “ Exclude companies from Hong Kong ” and “ add the control variable of ‘cultural distance’ ” and the results of tests are the same as the above. In conclusion, this paper studies the overseas M&A activities of Chinese enterprises by combining theoretical analysis and empirical test, hoping to provide some empirical support and experience reference for the overseas M&A activities of Chinese enterprises in the future.

Date of Award	26 May 2020
Original language	Chinese (Traditional)
Awarding Institution	City University of Hong Kong
Supervisor	Xueping WU (Supervisor) & Qian Sun (External Supervisor)