A Study On Technology Sourcing Overseas M&A Integration And Technology Innovation

As more and more Chinese enterprises go abroad, technology sourcing overseas acquisitions have become an important way to enhance the technological innovation capability of enterprises in China. Through mergers and acquisitions (M&A), acquirer company can get and absorb the target company’s R&D resources, and thus achieve a technological leap and enhance the acquirer’s innovation capability. However, most of the technology acquisition of overseas M&A did not achieve the desired success, the reason lies in improper post-merger integration. At present, both in theory and practice, academics and entrepreneurs have realized the key role of integration for the success of mergers and acquisitions, but how to choose the appropriate integration mode to achieve the potential synergies in the M&A still lacks widely accepted theoretical support and practical experience. Therefore, in-depth and systematic study of technology sourcing overseas M&A integration, to discuss the impact of M&A integration technology innovation, and solve merger integration puzzles, has an important theoretical value and practical significance.The school of strategic management points out that the potential synergies of the M&A come from resources relation, while school of the process focuses on the impact of post-integration on post-merger performance. This paper argues that resource similarity and complementarity between the acquirer and acquired company, are the source of value creation after the merger, but an appropriate integration strategy is needed to realize that value. Therefore, this paper combined the thought of strategic management school and process school, and established a more comprehensive framework " resource relatedness-integration strategy-technology innovation", through which we explore the resources similarity, complementarity, the degree of integration and the autonomy of target company and their effect mechanisms on technology innovation. On this basis, we carried out research on overseas M&A integration and technology innovation of theoretical research, and then tested and supported the theory through simulations, statistical evidence and multiple comparative cases.On the base of domestic and foreign classical literature, this paper first analyzes the mechanism of how the technology acquisition integration process influence technological innovation, and analyzes the interaction between resource similarity, complementarity, integration degree, autonomy of target and technological innovation, and after that we put forward the core assumptions of this article. Firstly, we analysized the synergies and friction effect of integration on technical innovation, and then study the connections between resources similarity and complementarity, M&A integration and technological innovation to provide a theoretical basis for further research. Secondly, we try to establish a quantitative mathematical model to reveal the impact of post-integration on technology innovation, and how the resources complementarity and similarity influence the optimal level of integration.which will fill up for this field by mathematical model.In the simulation part, based on the above model, we applied a system dynamics method to reveal the dynamic process of impact of integration degree and autonomy of target impact on technological innovation capability of enterprises under different combinations of resources similarity and complementary. Through a "resource relatedness-integration-technological innovation" system dynamics model to study the dynamic evolution of technological innovation after integration. This section will use Vensim software for system dynamics simulation, which is a complement of mathematical model for dynamic analysis.In the empirical analysis section, we selected 52 Chinese cases of Technology Sourcing overseas M&A events, to build a statistic model of resource similarity, complementarity, integration level, target autonomy and technological innovation performance. PLS-SEM was used to test the impact of resource similarity, complementarity, integration level and autonomy on innovation in Chinese technology overseas M&A, which will provide an empirical support for the theory of the foregoing analysis.In part of case analysis, with the continuation of the analysis in the first three parts, this paper selected four cases for study, including Geely’s acquisition of Volvo, Yantai Wanhua’s acquisition of Bosuchem, Goldwind’s acquisition of Germany Vensys and TCL’s acquisition of Alcatel. We use multiple case studies to verify the proposed hypothesis, and reveal the integration process of technology sourcing M&A and its influence path. Then, we summarized the optimal integration strategy for integration under different combinations of resource similarity and complementarity in M&A to maximize their innovation capacity. This study can provide a guide of practical meaning for Chinese overseas M&A.