Xiong, T.: Mergers and Acquisitions by Chinese Multinationals in Europe: The Effect on the Innovation Performance of Acquiring Firms

Xiong, T.: Mergers and Acquisitions by Chinese Multinationals in Europe: The Effect on the Innovation Performance of Acquiring Firms

JEL classification: O1, O3, F23

Key words: mergers and acquisitions, M&A, innovation performance, emerging market multinationals (EMNEs), learning, China, EU

Summary:

This study aims to investigate the effects of mergers and acquisitions (M&As) by Chinese multinational firm in the EU28 on the subsequent innovation performance of acquiring firms with different technological intensities and types of corporate ownership The study does so by applying the Zero-Inflated Negative Binomial estimation to analyze novel longitudinal firm-level data covering the period from 2010 to 2018. The empirical evidence suggests that Chinese acquiring firms are generally able to enhance their innovation performance after merging or acquiring firms from the EU28 countries. Furthermore, this study reveals that medium low- and low-tech firms significantly improved their innovation performance after undertaking M&As, but the same effect cannot be identified for firms in the high- and medium high-tech groups. Finally, strong evidence confirms the significant increase in innovation output of private-owned enterprises in the post-acquisition era compared with state-owned or -controlled enterprises.

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