Research On The Influence Of Restrictive Measures Of Host Country’s Service Trade On The Success Or Failure Of Cross-border M&A Of China’s Service Industry

With the transformation and upgrading of China’s economy and the continuous liberalization of its foreign policy,more and more Chinese enterprises choose to invest overseas,among which cross-border M&A plays an important role in many Chinese enterprises’ market development.From the perspective of industry,the service industry has attracted much attention in recent years.However,there are a series of restrictions on investment in service industry in the international market,which leads to a low success rate of cross-border mergers and acquisitions in service industry.Therefore,this paper is devoted to studying the influence mechanism of service trade restriction measures of the host country on cross-border M&A of China’s service industry.This paper divides restrictions on service trade into market access type and national treatment type,and discusses how restrictions in different types affect the success or failure of cross-border mergers and acquisitions.Market access restrictions mainly restrict enterprise qualifications,including enterprise types,enterprise qualifications and personnel qualifications,etc.However,the national treatment restriction measures mainly affect the production and operation activities of enterprises after they enter,which is reflected in the performance problems after mergers and acquisitions.Therefore,both types of restriction measures affect the success of cross-border mergers and acquisitions.Secondly,based on the data of 517 M&A transactions conducted by China in 47 countries and regions from 2014 to 2020,the Logit model is established to conduct an empirical study on the restrictive measures of the host country’s service trade and cross-border M&A of China’s service industry.On the basis of full sample analysis,a new grouping of restrictive measures and industry differences is added.In order to obtain a more stable conclusion,this paper corrects the endogeneity by delaying explanatory variables by one period.Through empirical research,it is found that Chinese enterprises are more likely to fail in countries with higher restrictions on service trade in the process of cross-border mergers and acquisitions.Judging from the types of restrictive measures,market access and national treatment service trade restrictive measures are negatively related to the success or failure of M&A.In terms of industry types,the restrictive measures of service trade in the host country have a negative impact on the success or failure of high-end service industry and general service industry,and have a high degree of impact on high-end service industry.Furthermore,this paper uses Probit model,which is also applicable to binary variables,to test the robustness,and the conclusion is still valid.Through theoretical and empirical research,this paper holds that before undertaking crossborder M&A,enterprises should make a cautious M&A plan,know the policies and measures of the host country on restrictions of service trade in detail,and enterprises should follow suit when choosing areas and industries for M&A.Besides,enterprises should strengthen their own development,strive to improve their own capabilities,fulfill their corporate social responsibilities locally,and enhance their competitiveness.