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Award for Salford paper on Chinese investment

Wednesday 3 January 2018

ACADEMICS from the University of Salford Business School have won a prestigious award for a paper on the economy of China.

Professor Jia Liu and Dr Christopher Muganhu were presented with the British Academy of Management Best Paper award at the annual conference held in Warwick. 

The paper, on mergers and acquisitions in Chinese markets, has implications for policy-makers and international investors, including those in the UK and could impact on the Northern Powerhouse. The results reveal that markets react favourably to the news of a mergers and acquisitions as they display optimism about the potential gains from the acquisition.

Professor Liu said: “The British Academy of Management is an internationally renowned society in the world of management so this is a fantastic accomplishment for Chris. To have one of our students achieve such success speaks volumes about our Finance PhD research excellence here at Salford. We’re all very proud and look forward to work with Chris on more publications.”
China has witnessed rapid and steady economic growth. This has inevitably resulted in the need for rationalisation and an increased demand for resources, including corporate capital. 

The Chinese government has also taken steps to reduce the national debt burden of state-owned enterprises (SOEs) through mergers and acquisitions (M&A) and has opened up traditionally restricted industries, making them more competitive. 

Despite the late development of M&A activity, such activity has grown, and has continued to grow, at phenomenal rates since its introduction in 1993. 

From 2001 to 2014, China’s M&A activity grew by five and a half times in terms of the number of transactions and more than doubled in terms of the total value of transactions. As the world’s second-largest economy celebrates unprecedented growth in M&A activity, it is of great importance to understand whether, and in what ways, domestic M&As create value to bidder shareholders in both the short-term and the long-term. 

Professor Liu added: “This research is vital and timely given that the UK government is strengthening the business relationship with China, and the Northern Powerhouse in particular would benefit from active investment in China’s corporate sector.”

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Sam Wood

0161 295 5361