Mergers and Acquisitions, Synergy, and Corporate Innovation: Evidence from China

Ping Zhang, Na Cao and Jieying Gao

Emerging Markets Finance and Trade, 2024, vol. 60, issue 5, 870-898

Abstract: Mergers and acquisitions (M&As) and innovation as essential business development strategies have attracted much interest in the capital market. A difference-in-differences model employing Chinese listed firms indicates that M&As significantly enhance corporate innovation. The potential mechanisms lie in the fact that M&As generate synergy in finance, corporate governance, and information. Complementary evidence shows that the M&A effect on innovation is heterogeneous across payment methods and goodwill. We conclude that synergies obtained from combining and restructuring are important drivers of innovation capabilities.

Date: 2024
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DOI: 10.1080/1540496X.2023.2266109

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