Governance or collusion? The M&A effects of common institutional ownership
Abstract This study examines the impact of common institutional ownership on corporate mergers and acquisitions (M&A) within China’s emerging market. The findings suggest that, while common institutional ownership decreases the likelihood of M&A, it positively influences the merger announcem...
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| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Springer Nature
2025-06-01
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| Series: | Humanities & Social Sciences Communications |
| Online Access: | https://doi.org/10.1057/s41599-025-05276-y |
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| Summary: | Abstract This study examines the impact of common institutional ownership on corporate mergers and acquisitions (M&A) within China’s emerging market. The findings suggest that, while common institutional ownership decreases the likelihood of M&A, it positively influences the merger announcement effect and merger performance. The heterogeneity analysis reveals that long-term and independent institutional investors play a more significant role in facilitating effective M&A. The mechanism analysis identifies two primary channels through which common institutional ownership exerts its influence: first, by leveraging acquisition experience and informational advantages to mitigate information asymmetry; second, by appointing directors and curbing managerial opportunism to strengthen corporate governance. These findings provide novel empirical evidence regarding the dual role of common institutional ownership in M&A, enriching the literature on its economic impact in emerging markets. Furthermore, they offer valuable insights for advancing well-structured M&A practices and refining capital market regulations. |
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| ISSN: | 2662-9992 |