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

Research output: Contribution to journalArticlepeer-review

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.

Original languageEnglish (US)
JournalJournal of International Trade and Economic Development
DOIs
StateAccepted/In press - 2023

All Science Journal Classification (ASJC) codes

  • Geography, Planning and Development
  • Development
  • Economics, Econometrics and Finance(all)

Keywords

  • emerging markets MNEs
  • innovation
  • M&As

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