Digital M&A and firm productivity in China

Yifu Chen, Liang Wang, Yongwei Ye and Yunqing Tao

Finance Research Letters, 2023, vol. 58, issue PA

Abstract: Using data from mergers and acquisitions (M&A) among Chinese listed firms from 2012 to 2021, this paper explores the influences of digital M&A on firms’ total factor productivity (TFP) and the underlying mechanisms. Our findings reveal that digital M&A positively affect firms’ TFP, which still holds after a series of robustness tests. According to mechanism tests, we find that digital M&A enhance firms’ TFP through dual conduits: the refinement of the human capital structure within firms, and the escalation of firms’ investment in research and development (R&D). Further heterogeneous analysis show that the stimulating effect of digital M&A on firms’ TFP is more pronounced in highly competitive industries, in regions characterized by superior market development, and within non-state-owned enterprises.

Keywords: Digital M&A; Total factor productivity; Human capital; R&D Investment (search for similar items in EconPapers)
JEL-codes: D22 G3 H32 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:58:y:2023:i:pa:s1544612323006980

DOI: 10.1016/j.frl.2023.104326

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