A Study On The Impact M&A Of Chinese Listed Firms On Their Innovation Capabilities

With the rapid development of digital technology,the ICT industry has become an important driver of global economic growth and an engine for economic transformation and upgrading.Cross-border M&As in the ICT industry have also become an important way for related firms to expand their scale,acquire advanced technology and market resources,enhance their international competitiveness and market position,and thus improve their creative capacity.However,as a windy investment project,cross-border M&As can bring positive impacts as well as dificulties and challenges to companies.This paper aims to investigate the impact of cross-border M&As on firms’ innovation capabilities in the ICT industry through a literature review and empirical research,in order to provide a reference for firms to make better use of cross-border M&As to improve their R&D and innovation levels.This paper first reviewed the literature on cross-border M&As theory,cross-border M&As in the ICT industry,and the measurement and influencing factors of firms’ innovation capability.Then,this paper proposed a theoretical mechanism and several hypotheses based on the characteristics of cross-border M&As in the ICT industry,arguing that ICT firms can expand their scale,acquire and reallocate internal resources,explore overseas markets,improve their R&D efficiency and thus promote their innovation capabilities through crossborder M&As.This paper employed the Propensity Score Matching Differences-inDifferences(PSM-DID)to study the impact of cross-border M&As on the innovation capability of ICT firms,using the cross-border M&A data of Chinese listed ICT firms in the Zephyr database from 2001 to 2021 as the treatment group,and matching to get the control group within Chinese listed firms based on the cross-border M&A decision model.Thereafter,several robustness tests were conducted and the research hypotheses were verified through heterogeneity analysis and mechanism testing.The main findings of this paper are:first,cross-border M&As within the ICT industry can improve the innovation capability of Chinese ICT firms.It helps firms to expand their scale,acquire talent and technology and other resources,explore overseas markets and improve their R&D efficiency,which in turn promotes their innovation capabilities.Second,cross-border M&As in the ICT industry have a higher impact on the innovation capabilities of state-owned ICT firms than non-state-owned ICT firms,because state-owned firms are able to make more secure M&As decisions and post-merger integration,whereas non-stateowned firms may make hasty decisions in order to acquire technology and increase their competitiveness,which may cause problems for the integration of business and organizational structures at a later stage,and affect the improvement of the innovation capacity of firms.Thirdly,cross-border M&As within the ICT industry have a higher contribution to the innovation capabilities of ICT firms in eastern China than those in central and western China.This paper argues that this is due to the high level of ICT industry development in eastern China,which can easily form an industrial agglomeration effect,while the industrial base in central and western China is weaker and the integration and technology absorption capacity of firms after M&A is weaker.Fourth,cross-border M&As within the ICT industry can improve the innovation capacity of ICT firms by increasing their R&D efficiency.Finally,this paper proposed policy recommendations at the firm and government levels.This paper believes that ICT firms should improve their R&D and technology absorption capabilities,and make prudent decisions through a comprehensive evaluation before mergers and acquisitions;while the government should introduce policies to assist companies in achieving high-quality cross-border M&A and to promote the balanced regional development of the ICT industry.