The effect of target information on the payment method during M&As: Evidence from China

We investigate the effect of target information on the M&A deal payment method in China. First, in our replication using the US data, the positive relation between target information and the use of stock payment is consistent with the existing literature, validating our empirical method. Second, our replication using the Chinese data provides weak support, if any, for the rational payment theory. Only one out of four target information proxies is positively related to the use of stock payment. Third, we explore the causes for the different empirical results when using the US and the Chinese samples and find that the effect of target information on the payment method highly depends on whether the acquirer is a state-owned enterprise.