Intellectual property rights enforcement and mergers and acquisitions: Evidence from China

Xiaoxuan Shi, Yuchen Song and Xi Wang

Pacific-Basin Finance Journal, 2023, vol. 79, issue C

Abstract: In this paper, the impact of intellectual property rights (IPR) enforcement on merger and acquisition (M&A) activity based on provincial data in China is examined. We document a significant increase in the probability of implementing M&A bids in provinces with efficient IPR enforcement. The result is robust after considering endogeneity and using alternatives to IPR measurements. In addition, cash-financed and local M&A bids are more likely to occur in provinces with better IPR enforcement. Our results suggest that increasing R&D expenditures, alleviating financing constraints and increasing product market competition are the possible mechanisms through which IPR enforcement affects the probability of M&A activity.

Keywords: Intellectual property rights enforcement; Mergers and acquisitions; R&D expenditures; Financial constraints; Product market competition (search for similar items in EconPapers)
JEL-codes: G34 K11 K42 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:79:y:2023:i:c:s0927538x2300080x

DOI: 10.1016/j.pacfin.2023.102014

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