Establishment of a Personal Data Protection System and Mergers and Acquisitions Behavior
Description
The Personal Information Protection Law of China came into effect on November 1, 2021. This law aims to protect personal information rights, regulate personal information-processing activities, and explicitly prohibit the excessive collection of personal information while regulating the processing of sensitive personal information. As this study explores the voluntary establishment of the PDPS rather than passive regulatory compliance, we selected sample years until 2021 to remove the impact of the policy. Since 2015, China has issued the Notice of Action Plan for Promoting the Development of Big Data to implement a big data strategy at the national level and promote the sharing of data resources, supporting the widespread application of digital technologies in traditional industries, and promoting rapid economic and social transformation. The rapid development of corporate data assets and related data protection implementation has also been evident since 2015. Therefore, this study selected all M&A transactions of A-share listed companies from the Shanghai and Shenzhen stock exchanges from 2015 to 2021 as the initial sample. We excluded samples that met the following criteria: (1) the acquirer was not a listed company; (2) the acquirer was a financial insurance company; (3) the acquirer was a Special Treatment company; (4) the M&A type was asset divestiture, asset replacement, or debt restructuring; (5) the M&A payment was less than 1 million RMB; and (6) there were missing variables in the sample. Additionally, if the same company completed multiple M&A transactions in the same year, only the first transaction was retained. Ultimately, we obtained a sample of 3,098 annual company observations. To mitigate the impact of extreme values, continuous variables were winsorized at the 1% level. The data used for the empirical analysis in this study were taken from the CSMAR database, with overseas operating income data sourced from CNRDS, corporate social responsibility rating data from Hexun.com, and original patent data from the National Intellectual Property Administration of China.