In the process of the vigorous development of China’s overseas M&As, we have often been restricted or boycotted in target countries. Critics claim that overseas M&As under China’s economic model is driven by non-market-oriented behavior, or that their acquisitions are motivated strategically with the objective to gain market dominance or to increase China’s political influence in target countries. The international suspicion about overseas M&As of Chinese companies inspired us. Are there systematic differences in overseas M&As between China and other countries? Is it reasonable to question China’s overseas M&As without comparison?
Therefore, from the perspectives of motivation and price, this paper uses a large deal-level dataset to investigate whether Chinese foreign acquisitions differ from cross-border investment coming from the United States, and responds to the suspicion. It is found that there is no significant difference between Chinese and American companies in market seeking; in terms of resource seeking, compared with American state-owned companies, the natural resource factors of target countries do not significantly affect Chinese state-owned companies; in terms of system, it is not found that Chinese companies prefer target countries with low system quality. However, there are some differences between Chinese and American companies in the following dimensions: Chinese companies prefer to purchase targets with larger scale, higher debt ratio but more patents, and they have strong technology-seeking motivation; Chinese state-owned companies are driven by government policies to a certain extent. Further analysis shows that Chinese companies do not pay higher M&A prices than American companies in overseas M&As. In general, the characteristics of overseas M&As of Chinese companies meet the specific needs of China’s current economic development.
The contributions of this paper are as follows: Firstly, based on the mainstream foreign direct investment motivation theory and combined with the economic reality of developing countries, this paper constructs a unified and comparable research framework, and uses the Logit model to bring Chinese and American overseas investment into this research framework, which makes the analysis have a certain theoretical basis. The framework not only expands the application scope of the motivation theory of FDI, but also provides new ideas and empirical reference for international comparison. Secondly, comparing the overseas M&As of Chinese companies with American companies, this paper responds to many international suspicion about the overseas M&As of Chinese companies, and helps to deepen the understanding of China’s overseas M&As.