Zou Guangyuan, holding China’s Financial Professional Qualification, is a pioneering researcher in internet finance and open banking with 10 years of practical experience at multinational Fortune 500 fintech companies. Currently working at a subsidiary of a financial regulatory institution, she has deeply participated in compliance architecture design for leading internet platforms and commercial banks, spearheaded the development of systemic risk prevention and control systems, and possesses professional expertise spanning fintech ethical governance, intelligent anti-money laundering monitoring, and cross-sectoral innovation regulation.
She defended her Executive Doctorate of Business Administration (EDBA) in March 2025 on the theme “Corporate Misconduct and M&As in China’s A-Share Market” under the supervision of Professor Franck Moraux, Professor at the University of Rennes 1, France.
Thesis Direction
Prof Moraux Franck
Thesis Title
Corporate misconducts and M&As in the China’s A-share market
Abstract
Corporate misconduct has severely harmed the interests of investors and other stakeholders, leading to significant disruptions in the healthy functioning of capital markets and social credit systems. Companies listed in China’s A-share market are particularly vulnerable to compliance risks due to their unique regulatory environment. With intensified regulatory scrutiny in recent years, an increasing number of firms have faced sanctions for misconduct. Such penalties not only result in legal consequences and financial losses but also diminish corporate reputation, affecting stakeholder trust and market performance. The resulting reputational damage impairs firms’ abilities to raise funds and maintain market standing, prompting an urgent need to explore effective mechanisms for reputation repair.
This research investigates the hypothesis that mergers and acquisitions (M&A) can serve as a strategic tool for repairing corporate reputation following misconduct. The study extends the theoretical framework of M&A motivations by introducing “reputation repair” as a key driver for firms facing reputational crises. By analysing the interplay between corporate governance, stakeholder theory, and M&A activities, this work offers insights into how companies can restore market confidence and stakeholder relationships after reputational damage. The study is anchored in the context of China’s A-share market and examines companies sanctioned for misconduct between 2008 and 2022. Using a robust dataset that integrates financial metrics, market performance, M&A activity, and compliance records, this research adopts advanced econometric techniques to explore the linkages between misconduct, M&A strategies, and firm performance.
A multi-stage methodology was employed. Logistic regression models were used to demonstrate the increased likelihood of M&A activities following corporate misconduct. Multiple regression analysis (MRA) examined the short- and long-term effects of M&As on financial performance. Additionally, propensity score matching (PSM) controlled for endogeneity issues, enabling a clearer understanding of the causal relationships. Robustness checks, including period splits and subgroup analyses, further validated the findings. Heterogeneity analyses highlighted variations in M&A outcomes based on restructuring purposes, amounts, and stakeholder categories.
The results indicate that M&A activities can partially mitigate the adverse effects of corporate misconduct. Firms engaging in M&As post-misconduct experience improvements in key stakeholder metrics, such as supplier credit and customer sales revenue, compared to non-M&A firms. The analysis also reveals that horizontal M&As yield the most substantial gains in profitability and market share, especially when involving high-value restructuring. However, the long-term efficacy of M&As is constrained by trade-offs in areas like R&D investment, potentially undermining innovation and competitive advantage. This underscores the importance of balancing short-term recovery goals with long-term strategic objectives.
This study provides significant contributions to both theory and practice. Theoretically, it enriches the discourse on M&A motivations and reputation management. Practically, it offers actionable insights for corporate managers and policymakers on navigating post-misconduct crises. By leveraging M&A strategies, firms can address reputational challenges, rebuild stakeholder trust, and achieve sustainable growth. Nonetheless, the effectiveness of M&A as a reputation repair tool depends on careful integration and alignment with broader strategic priorities.