The Impact of Legal Systems on the Equity Choices of Cross-border Merger and Acquisition by Chinese Enterprises: An Empirical Study Based on RCEP Member Countries

There has been extensive research on cross-border mergers and acquisitions (M&A), but relatively few studies have addressed the issue of equity selection; the influence of legal system has also been overlooked. This study aims to deepen the understanding of corporate cross-border M&A by exploring whether and when legal system affects equity selection in cross-border M&A. Based on institutional theory, this study constructs models and finds that legal system positively influences corporate cross-border M&A equity decisions. This study further discovers that legal advisors and financial advisors weaken the positive impact of legal system on corporate cross-border M&A equity decisions. This paper extends the existing research on the impact of legal system on corporate market strategies. This is achieved by innovatively expanding the consequences of legal system to equity selection in companies’ cross-border M&A. Legal system is an important and underexplored topic in the field of international trade. Additionally, this paper enriches the existing research on legal system at the micro-level of enterprises, providing new theoretical foundations for firms in emerging economies to engage in cross-border M&A activities.