Author(s)

Sen Fan, Qian Li*

Affiliation(s)

State Grid Shijiazhuang power supply company, Shijiazhuang 050051, Hebei Province, China.

Corresponding Author

Qian Li

ABSTRACT

The relationship between corporate mergers and acquisitions and innovation has been widely concerned by academia and industry. At present, digital mergers and acquisitions, as an important way for enterprises to achieve digital transformation, are rapidly heating up around the world, and Chinese companies are also investing in digital mergers and acquisitions. However, digital mergers and acquisitions with digital technologies, services and markets as the main acquisition targets are quite different from traditional mergers and acquisitions. Whether digital mergers and acquisitions can effectively improve the innovation performance of acquired companies is still an important question to be answered. On the basis of theoretical analysis, using the digital M&A transaction data and patent data of listed companies in China from 2009 to 2018, we deeply explore the impact of digital M&A on the innovation performance of M&A companies, and compare and analyze (China) domestic digital M&A and cross-border digital M&A. The differential performance of mergers and acquisitions, and at the same time analyze the influence mechanism of the innovation effect of digital mergers and acquisitions from three aspects: knowledge stock, enterprise price-earnings ratio and profit before interest, taxes, depreciation and amortization. In the empirical part, the difference-in-difference method based on propensity score matching is used to construct an econometric model, which can alleviate the self-selection effect and endogenous problems between digital mergers and acquisitions and corporate innovation to a certain extent. The research results show that digital mergers and acquisitions can effectively promote the innovation performance of mergers and acquisitions, and compared with the number of innovations, it has a stronger effect on the quality of innovation; subdividing mergers and acquisitions shows that digital mergers and acquisitions in China can simultaneously promote the number of innovations and innovations of mergers and acquisitions. At the level of theoretical analysis, combining the characteristics of digital economy and technology with traditional M&A theories enriches the research objects and research mechanisms of existing M&A studies. At the level of empirical evidence, the causal identification of the innovation effect of digital mergers and acquisitions will help companies better improve innovation performance through digital mergers and acquisitions, and provide important references for the government to better support and guide companies to participate in digital investment.

KEYWORDS

Digital mergers and acquisitions; Listed companies; Innovation quantity; Innovation quality; Causal identification.

CITE THIS PAPER

Sen Fan, Qian Li. Digital M&A and corporate innovation. World Journal of Management Science. 2023, 1(1): 1-14.

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