Optimal Decision-Making in Chinese Cross-Border Mergers and Acquisitions: A Perspective of Overbidding

Table 6

SUR regression results of estimating the probability of acquisition success and the bidder’s profit.

Variables	(1); Dependent variable: probability of success	(2); Dependent variable: bidder’s profit
Intercept	−0.5844 (−1.23)	1.03691 (1.57)
Premium	−0.02387 (−4.37)	−0.00385 (−0.51)
Cash_payment	0.1174 (9.22)	−0.02285 (−1.29)
Toehold	−0.0579 (−4.33)	−0.0238 (−1.29)
Horizontal	0.0031 (0.27)	0.0059 (0.38)
Final_control	−0.1645 (−11.84)	−0.0464 (2.40)
Target_size	−0.1996 (−3.25)	0.14462 (1.69)
Target_Hightech	−0.08948 (−7.20)	−0.01365 (−0.79)
Target_patent	−0.00399 (−1.16)	−0.0109 (−2.30)
Target_ROA	−0.03535 (−2.22)	−0.04454 (2.01)
Target _LEV	0.0661 (2.29)	0.0219 (0.55)
Acquirer_size	0.0105 (0.20)	−0.14108 (1.97)
RelativeSize	0.7517 (2.01)	−0.9646 (−1.85)
GDP	0.3039 (3.54)	−0.00715 (−0.06)
TFP_FAPG	0.02467 (3.63)	−0.00184 (−0.19)
Export	0.03534 (5.17)	0.0033 (0.35)
LogDistance	0.0444 (1.33)	−0.02916 (−0.63)
No. of observations	346	346
Adj R^2	0.9513	0.023

Table 6 summarizes the estimation results of (3) and (4) for calculating overbidding. T-statistics are in parentheses. , , and indicate significance at 1%, 5%, and 10% levels, respectively. The regression estimation is obtained using the SUR procedure. The dependent variable in column (1) is the probability of success and that of column (2) is the bidder’s profits. The two key coefficients of interest are the coefficients on premium: is the estimate of and of .According to the research data we collected, we did not find significance for the regression coefficient of Premium in Column (2). The T-statistics (−0.51) are reported in parentheses.