Abstract:
Cross-border acquisitions constitute the main form of Chinese OFDI, Using the patent applications data of A-share listed companies from 2008 to 2015, this paper provides empirical evidence on the relationship between cross-border acquisitions and innovation activities of the acquirer. To account for the possibility that performance differences arise due to the selection, we uses a nonlinear difference-in-differences approach combined with propensity score matching to create an appropriate control group of firms. The results indicate a considerable increase in post-acquisition innovation in the acquirer, and the effect is lasting but declining year by year. Moreover, we also find that the number of the invention and utility patent application increases significantly in those firms after the acquisition. Which means that the acquirer firms pursue the quality of innovation instead of its numbers.
Abadie, A., and G. Imbens. 2016. “Matching on the Estimated Propensity Score,” Econometrica, 84(3):781~807.
[11]
Bena, J., and K. Li. 2014. “Corporate Innovations and Mergers and Acquisitions,” Journal of Finance, 69(5):1923~1960.
[12]
Bilir, K., and E. Morales. 2016. “Innovation in the Global Firm,” NBER Working Papers. No.22160.
[13]
Chen, W. 2011. “The Effect of Investor Origin on Firm Performance: Domestic and Foreign Direct Investment in the United States,” Journal of International Economics, 83(2): 219~228.
[14]
Criscuolo C., E. Haskel, and M. Slaughter. 2010. “Global Engagement and the Innovation Activities of Firms,” International Journal of Industrial Organization, 28(2):191~202.
[15]
Desai, M., F. Foley, and J. Hines. 2009. “Domestic Effects of the Foreign Activities of US Multinationals,” American Economic Journal: Economic Policy, 1(1):181~203.
[16]
Griffith, R., J. Van Reenen, and R. Harrison. 2006. “How Special Is the Special Relationship? Using the Impact of U.S. R&D Spillovers on U.K. Firms as a Test of Technology Sourcing”, American Economic Review, 96(5):1859~1875.
[17]
Griliches, Z. 1979. “Issues in Assessing the Contribution of Research and Development to Productivity Growth”, Bell Journal of Economics, 10(1):92~116.
[18]
Guadalupe, M., O. Kuzmina, and C. Thomas, 2012. “Innovation and Foreign Ownership”, American Economic Review, 102(7):3594~3627.
[19]
Helpman, E. 1984. “A Simple Theory of International Trade with Multinational Corporations”, Journal of Political Economy, 92(3):451~471.
[20]
Helpman, E., M. Melitz, and S. Yeaple. 2004. “Export versus FDI with Heterogeneous Firms”, American Economic Review, 94(1):300~316.
[21]
Jovanovic, B., and Peter L. Rousseau. 2008. “Mergers as Reallocation”, Review of Economics and Statistics, 90(4):765~776.
[22]
Markusen, J. 2002. Multinational Firms and the Theory of International Trade. Published by MIT Press.
[23]
Neary, J. P. 2007. “Cross-Border Mergers as Instruments of Comparative Advantage,” Review of Economic Studies, 74(4):1229~1257.
[24]
Norbäck, P., and L. Persson. 2007, “Investment Liberalization, Why a Restrictive Cross Border Merger Policy Can be Counterproductive”, Journal of International Economics, 72(2): 366~380.
[25]
Nocke, V., and S. Yeaple. 2007. “Cross Border Mergers and Acquisitions Greenfield Foreign Direct Investment: The Role of Firm Heterogeneity”, Journal of International Economics, 72(2): 336~365.
[26]
Puhani, P. 2012. “The Treatment Effect, the Cross Difference and the Interaction Term in Nonlinear ‘Difference-in-Differences’ Models”, Economics Letters, 115(1): 85~87.
[27]
Shleifer, A., and R. Vishny. 1988. “Value Maximization and the Acquisition Process,” Journal of Economic Perspectives, 2(1):7~20.
[28]
Smith, J., and P. Todd. 2005. “Does Matching Overcome LaLonde's Critique of Non experimental Estimators?” Journal of Econometrics, 125(1-2):305~353.
[29]
Stiebale, J. 2013. “The Impact of Cross Border Mergers and Acquisitions on the Acquirers' R&D”, International Journal of Industrial Organization, 31(4): 307~321.
[30]
Stiebale, J. 2016. “Cross-Border M&A and Innovative Activity of Acquiring and Target Firms,” Journal of International Economics, 99(C):1~15.
[31]
Stiebale, J., and F. Reize. 2011. “The Impact of FDI through Mergers and Acquisitions on Innovation in Target Firms”, International Journal of Industrial Organization, 29(2):155~167.
[32]
Wei S., Z. Xie, and X. Zhang. 2017. “From ‘Made in China’ to ‘Innovated in China’: Necessity, Prospect, and Challenges,” Journal of Economic Perspectives, 31(1):49~70.
[33]
Winkelmann, R. 2008. Econometric Analysis of Count Data. Published by Springer.