Acquiring Innovation - Do Chinese acquisitions in developed countries spur innovation at home?

Mariana Spatareanu ()

Working Papers Rutgers University, Newark from Department of Economics, Rutgers University, Newark

Abstract: Chinese multinationals’ acquisitions of Western firms have increased dramatically in recent years. However, relatively little is known about the effects of these acquisitions on the acquirers’ innovation. Using Chinese acquisitions in Western countries during 2000-2017 and applying matching and difference in difference methods we find that Chinese acquirers innovate more after acquisitions. Their patenting activity significantly picks up after the acquisitions of high-tech firms in developed countries. The results give support to the widespread view that Chinese companies are acquiring foreign technologies through acquisitions; they also show that Chinese companies successfully transfer and incorporate the newly acquired technologies at home, especially if the parent company was an innovator before the acquisition. The results also show that the degree of product complexity of the target firms matters and increases the innovation activity of Chinese acquirers.

Keywords: M&As; emerging markets MNEs; innovation (search for similar items in EconPapers)
JEL-codes: F23 O31 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2023-02
New Economics Papers: this item is included in nep-cna, nep-com and nep-sbm
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