Imprinting and peer effects in acquiring state ownership: evidence from private firms in China

China has recently launched a historical mixed ownership reform. We examine both imprintingand peer effects in private takeovers of state ownership through a proprietary dataset of listedfirms on the Shanghai and Shenzhen Stock Exchanges. Our findings suggest that first experienceaffects private firm's takeover decisions, in that negative experience of either poor post-takeoverperformance or high takeover premium impedes subsequent takeovers. In addition, private firm'spolitical ties alleviate the negative imprinting effect. However, private firms' business tiesstrengthen the negative imprinting effect. Private firms without antecedent experience tend tofollow their peers in taking over state ownership. Antecedent failures can therefore be passed bythe peers to potential acquirers. Our findings have policy implications in the context of China'sconcurrent state-owned enterprise (SOE) reforms. Refereed/Peer-reviewed