Market reactions to chinese outward foreign direct investment

This paper comprehensively examines whether Chinese cross-border M&As create value for Chinese bidding firms and whether stock markets around the globe react consistently to those M&As. Results indicate that, in general, markets respond positively to Chinese cross-border M&A deals, but that these reactions are not consistent among geographically dispersed markets. While stock markets in Europe, the US, Asia, and China present comparable returns, the American over the counter market (OTC) reacts significantly different from all the major markets with abnormally high stock returns upon the time of the deal announcement.