A Study On The Impact Of Legitimacy On Micropolitical Risks In Cross-Border M&A

With the proposition of "Made in China 2025" and the rapid development of Chinese technology-based enterprises,more and more Chinese technology-based enterprises expect to acquire advanced technology through cross-border mergers and acquisitions to improve their competitiveness in the international market.With the increase of the pace of Chinese technology companies going abroad,some problems have gradually emerged in cross-border mergers and acquisitions.Now,countries attach great importance to their technological assets.Besides,the government has strengthened supervision of cross-border mergers and acquisitions of domestic technology-based enterprises,which put forward higher requirements on the ability of multinational enterprises to respond to political risks.In the process of cross-border mergers and acquisitions,micro-political risks have brought serious losses to the transnational operations of Chinese technology-based enterprises.Scholars believe that corporate legitimacy is an important factor affecting micro-political risks of enterprises.Therefore,exploring how corporate legitimacy affects micro-political risks in the process of cross-border mergers and acquisitions is particularly important for Chinese technology-based enterprises to reduce political risks by obtaining legitimacy.Firstly,this thesis analyzes the status and characteristics of Chinese technology-based enterprises’ cross-border mergers and acquisitions.Then,further analyze the micro-political risks encountered by Chinese technology-based companies in cross-border mergers and acquisitions.Secondly,we selected Huawei M & A 3leaf and Lenovo M & A IBM as research cases.After collecting data on Huawei M & A and Lenovo M & A,we use grounded theory to analyze the data and build a model of the impact of legitimacy on micro-political risks in the cross-border M & A of Chinese technology companies.Finally,it puts forward suggestions for the political risk management and control of Chinese technology companies in cross-border mergers and acquisitions,so as to reduce the political risks of Chinese technology companies in cross-border mergers and acquisitions.Through the analysis of cases,this article mainly draws four conclusions:(1)In cross-border mergers and acquisitions,the factors affecting the legality of a company’s regulation include the identity of the company,technological gaps,compliance with laws,and cooperation with review.Factors that affect the legality of an enterprise’s norms include the transparency of the enterprise and the recognition of people in the industry.Factors affecting corporate legitimacy include internal employee recognition and employee employment of the acquired company;(2)Insufficient legitimacy will cause stakeholders at the national level,industry level,and enterprise level to take different measures against mergers and acquisitions Intervention,stakeholder intervention leads to political risk of mergers and acquisitions;(3)Regulatory legitimacy is the main cause of political risk,and insufficient regulatory legitimacy and insufficient cognitive legitimacy will aggravate political risk;(4)Obtaining regulatory legitimacy and cognitive legitimacy will help stakeholders in the industry and the acquired company to take measures to slightly reduce the probability of political risk.There are two innovations in this article.Firstly,this article focuses on the impact of legitimacy on micro political risks in cross-border mergers and acquisitions of Chinese technology companies.The topic is relatively new.Secondly,it studies the impact of legitimacy on political risk from the perspective of stakeholders.It has innovative points of view.