The Impact of Overseas Mergers and Acquisitions on Corporate Business Risk——An Empirical Analysis Based on Chinese Listed Enterprises

Overseas mergers and acquisitions (M&A) has become an important route for companies to enter the international market, but there is a lack of clear answers in the existing literature on how overseas M&A affects corporate business risk. This paper empirically examines the impact of overseas M&A on corporate business risk based on propensity score matching and difference-in-difference method using financial data of Chinese listed companies matched with cross-border M&A transaction data from Wind database from 2010 to 2019. The findings show that overseas M&A significantly reduce corporate business risk through the diversification risk dispersion effect; the heterogeneity analysis shows that overseas M&A have a more significant effect on reducing business risk for private enterprises compared to state-owned enterprises. The findings of the study provide more direct empirical evidence for the government's strategy of encouraging and supporting enterprises to “go global”.