Property rights protection and mergers and acquisitions

Tian Jin Fang, Jianlei Han, Jing He, Jing Shi*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

3 Citations (Scopus)
12 Downloads (Pure)


This paper examines the impact of property rights protection on mergers and acquisitions (M&As). To establish causality, we exploit the plausibly exogenous variation generated by the enactment of China's 2007 Property Law, which significantly strengthened the protection of tangible property rights. We document that firms display a higher probability of announcing M&A bids after the law's enactment. In addition, firms with higher asset tangibility exhibit greater (less) likelihood of initiating cash-financed (stock-financed) M&A bids. Further, our findings suggest that increased product market competition and improved access to finance are two plausible underlying economic mechanisms through which property rights protection affects corporate takeovers. Taken together, this paper provides new insight into the real effect of property rights protection on the market for corporate control.
Original languageEnglish
Article number101593
Pages (from-to)1-16
Number of pages16
JournalPacific-Basin Finance Journal
Publication statusPublished - Sept 2021


  • Property rights protection
  • Mergers and acquisitions
  • Asset tangibility


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