Grabbing hand or helping hand? Ownership interventions and acquirers returns; the role of provincial idiosyncrasies
研究中国省级市场化和法律环境差异如何影响政府所有权干预与收购方回报的关系，发现高市场化地区和强法律环境下收购方回报更高。
Abstract Firm's performance is not only influenced by sound decisions but also by institutional processes. This study argues that the effect of government intervention on acquisition returns is partly dependent on institutional factors such as provincial marketization and the legal environment. This study employs ownership and merger and acquisition regulations issued by the Chinese government 2003–2018 to measure government intervention and also employs both the OLS and the random effects technique. The result shows a positive relationship between ownership intervention and acquisition returns. Next, the study finds that variances in regional marketization and the legal environment strengthen this relationship such that acquirers in high marketization regions and acquirers in a robust legal environment earn higher returns than acquirers in a low marketization region and acquirers in a weaker legal environment. The results imply that acquisition returns are not even across all locations in a transitional economy. Ongoing policies should aim at bridging the variances in different locations as it impacts acquirers' returns.