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Article
BUSINESS RELATIONSHIP NETWORK OF HOST BROKER AND PERFORMANCE OF THE ACQUIRED LISTED COMPANIES ON THE NEW THIRD BOARD MARKET IN CHINA[1]3
Wei Lei, Heng Wang, Rong Miao
ABSTRACT: In the context of the rapid growth of mergers and acquisitions (M&A) in the New Third board markets of China, the current literature mostly studies the performance of M&A from the perspective of the acquirers and their network or intermediaries’ network. To explore the influencing factors of host brokers’ business relationship network promoting the performance of the acquiree and their action mechanism, cross-section data of listed companies on New Third board markets were merged by listed companies on the Shanghai and Shenzhen Stock Exchanges in China during 2014-2020 were used, measurement model for the centrality of the business relationship network of brokers was constructed, and the action mechanism of the business relationship network of the host brokers on the performance of listed companies in the New Third board markets after being acquired was analyzed. Results reveal that the host broker’s business relationship network significantly elevates the performance of companies listed on the New Third Board markets after being acquired by listed companies on the Shanghai and Shenzhen Stock Exchanges. Conclusions provide a significant reference value for understanding reference value for understanding the theory and practice of capital market financial intermediary networks and M&A under the guidance of imperfect institutions and "relational society,” as well as improving the OTC (Over the Counter) capital market system in China.
KEYWORDS: host broker, the performance of acquiree, business relationship network, companies listed on the new third board market.
JEL classification: L91, O18, R11.
3Acknowledgments: This study was supported by the Shaanxi Soft Science General Project (No. 2022KRM037); Natural Science Basic Research Project of Shaanxi Province (No. 2022JQ-730); Xi’an Polytechnic University Doctoral Research Foundation Project (No. 107020566).