Implicit regulation in M&As:Evidence from voluntary earnouts in China  

作　　者：Wen Zeng Huifang Yin 

机构地区：[1]Shanghai University of Finance and Economics,China

出　　处：《China Journal of Accounting Research》2024年第2期147-163,共17页中国会计学刊（英文版）

基　　金：Fund Project of Shanghai University of Finance and Economics(Grant CXJJ2022-307);National Natural Science Foundation of China(Grant 72372097);the Humanities and Social Sciences Fund of the Ministry of Education(MOE)(Grant 20YJA790083);the Shuguang Program of the Shanghai Education Development Foundation,the Program for Innovative Research Team of SUFE,the MOE Project of the Key Research Institute of Humanities and Social Science in University(Grant 22JJD790093);professional English language editing support provided by AsiaEdit(asiaedit.com).All errors are our own.

摘　　要：Earnout provisions(“earnouts”hereafter)provide for contingent payments in M&A agreements and play a role in reducing information asymmetry.However,in China,earnouts are not solely driven by negotiations between acquirers and targets but are also related to regulatory preference.The CSRC amended the M&A regulation in 2014,deregulating mandatory earnouts while retaining the approval system.Leveraging on this context,we explore whether regulators implement implicit regulation by encouraging the usage of voluntary earnouts,and the economic consequences of such action.Our results show that earnouts are more likely to be included in an M&A contract when the deal requires CSRC approval.M&As that involve earnouts are also more likely to obtain regulatory approval and in a shorter time.These findings suggest that regulators may still prefer earnouts even after deregulation.In addition,we find that the association between voluntary earnouts and acquirers’postacquisition performance is negative when the M&A deal requires regulatory approval,suggesting that voluntary earnouts influenced by regulatory preference can potentially have a negative impact.Further analyses indicate that this impact can be alleviated by comment letters and market monitoring.Our findings provide regulators with insights into the effects of the regulatory reform in the M&A market.

关 键 词：Voluntary Earnouts Implicit Regulation Regulatory Reform 

分 类 号：F832.51[经济管理—金融学]