Feiqiong Chen’s research while affiliated with Zhejiang University and other places

Promoting home-country industrial innovation via overseas mergers and acquisitions (M&A) integration is crucial for latecomers. However, the transmission mechanism for innovation remains unclear. Taking the resource-based view, we apply network theory to illustrate this cross-level process. Based on technology-sourcing overseas M&A samples in China, a mediating effect model shows that with a lower resource similarity level, a higher resource complementarity level and a lower external network embeddedness, the acquirer should choose a lower integration degree to improve internal and external knowledge-network reconfiguration, thus benefiting home-country industrial innovation. Our findings help enrich overseas M&A research on enterprise’s dual-network embeddedness and help latecomers catch up.

Overseas mergers and acquisitions (M&A) integration is an effective way to promote home-country industrial innovation. However, much remains unknown about this mechanism. We provide a comprehensive understanding, by taking a resource-based view, focusing on the role of internal and external networks as bridge, and exploring the moderating effect of home-country institution. Based on 119 samples in China and 311 samples in the U.S. of technology-sourcing overseas M&A, structural equation model analysis reveals that in a more developed home-country institution, American acquirers’ appropriate integration matched with resource relatedness significantly improves internal network cohesion and external network position, promoting industrial innovation. In contrast, constrained by a less developed home-country institution, Chinese acquirers’ internal network cohesion improvement is only significant in low-degree integration matched with high-resource-complementarity and low-resource-similarity, and the mediating effect of external network position improvement is significantly weaker than that of American. Research conclusions provide insights into the catching-up of latecomers.

Chinese enterprises’ technology-sourcing overseas mergers and acquisitions (M&A) integration is an important force to accelerate the high-quality industrial development. However, the existing theories lack a thorough explanation of this mechanism. Based on four typical cases in Chinese manufacturing industry, this study applied a multiple-case study method to explore the relationships among the four basic categories of ‘resource relatedness’, ‘integration degree’, ‘innovation network position’ and ‘industrial technology innovation’ by in-depth interviews with enterprise executives and second data analysis. We find out that acquirers’ appropriate integration degree which matches different combinations of resource similarity and complementarity, will efficiently enhance centrality and structural holes of the acquirers in the global innovation networks, and thus promote home-country industrial technology innovation in the three functional areas of research and development (R&D), operations, and upstream and downstream activities. Based on resource-based view and by emphasising acquirers’ centrality and structural holes improvement in the global innovation networks as the crucial links, this study deepens the overall understanding of the entire process of enterprises using overseas M&A integration to promote the home-country industrial technology innovation and provides insights into the technological leapfrogging of latecomers from developing countries.

Appropriate integration in technology sourcing overseas M&A is effective for acquirers to improve their innovation network positions and to promote domestic industrial innovation. We use the technology sourcing overseas M&A of Chinese and South Korean manufacturing industries as samples for empirical analysis. The results show that post-merger integration strategy should match resource characteristics between acquiring and acquired firms to promote industrial innovation through innovation network position improvement. Specifically, high-degree integration should match high-resource-similarity / low-resource-complementarity acquired firms, low-degree integration should match low-resource-similarity / high-resource-complementarity acquired firms, and moderate-degree integration should match high-resource-similarity / high-resource-complementarity acquired firms. The acquirer’s home country institutional development enhances the effect of post-merger integration. This study provides guidance for promoting industrial innovation through post-merger integration.

Post-merger integration plays a key role in the success of mergers and acquisitions, but how to choose the appropriate integration mode to achieve potential synergies in mergers and acquisitions (M&As) still lacks widely accepted theoretical support and practical experience. Therefore, this article establishes a mathematical model considering the similarity and complementarity of resources in an attempt to explore the optimal integration strategy (including the choices of integration degree and autonomy granted to the target) under different conditions of resources similarity and complementarity, thus building a comprehensive framework that considers pre- and post-merger factors together to jointly explain innovation realization in technology-sourcing cross-border M&As. The results show that the higher the resource similarity, the higher the degree of integration and the lower the degree of target autonomy. Conversely, the higher the resource complementarity, the lower the degree of integration and the higher the degree of target autonomy. Resource similarity and resource complementarity have negative interactions for integration and target autonomy. The higher the resource similarity, the faster the convergence of optimal degree of integration, while the higher the resource complementarity, the slower the convergence. The study results add to our knowledge of M&A integration management, and provide some implication for practitioners.

We construct a Markov game of cross-border post-merger integration on technology innovation. The acquirer chooses the integration degree considering resource backgrounds and then makes innovation collaborations. Equilibrium analysis and numerical examples suggest that when resource similarity is high and resource complementarity is low, the acquirer should choose a high integration degree to improve the number of innovation collaborations and increase technology innovation. When resource similarity is low and complementarity is high, the acquirer should choose a low integration degree. When resource similarity and complementarity are both high, the acquirer should choose a medium integration degree. We run quantile regressions using samples of cross-border mergers and acquisitions proposed by acquirers from China, Japan and the United States in the period of 2000-2013. The dynamic game and quantile regressions altogether provide new insight and empirical evidence for understanding post-merger integration's effect on technology innovation under different resource backgrounds. The paper provides theoretical direction for choosing proper cross-border post-merger integration degree to improve innovation with resource-based view.

Overseas mergers and acquisitions (M&A) proposed by companies from emerging economies have been aiming to secure outward technology sourcing from developed countries in order to improve their technology innovation abilities in recent years. This paper proposes a comprehensive analytical framework of post-merger integration’s influence on technology innovation by global game modeling. We show how different resource similarity and resource complementarity backgrounds of the acquirer and target companies can affect post-merger strategies and technology innovation output through multi-stage analysis with an asymmetrical payoff structure. We focus on two main dimensions of post-merger integration, which are integration degree and target autonomy. Equilibrium analysis that is based on potential innovation output signals show that resource similarity has a positive relation with integration and a negative relation with target autonomy in overseas M&A; however, resource complementarity has the opposite effects compared with resource similarity. The positive interaction between resource similarity and complementarity will trigger more M&A and increase the degrees of integration and autonomy; M&A integration has a positive impact on technology innovation output. The innovation growth of the acquiring company is affected by the effectiveness of the post-merger process and the interaction of substitution elasticity with resource potential difference. Our study provides insight into the factors driving post-merger decisions and contributes to a multi-stage resource-based understanding of technology innovation induced by overseas post-merger integration.

In this paper, we examine the match between resource relatedness and post-merger integration on technology innovation of acquiring firms to find the rationale behind technology-sourcing cross-border mergers and acquisitions (M&As) of Chinese multinational enterprises. Using a sample of 88 Chinese technology-sourcing cross-border M&As, we find that the acquirer will improve technology innovation when greater resource similarity between the acquirer and target firms is matched with a high integration degree and a low target autonomy level. Meanwhile, the acquirer can improve technology innovation when greater resource complementarity is matched with a low level of integration degree in technology-sourcing cross-border M&As. This paper provides the acquiring firms with fresh ideas of how to make the integration decisions of technology-sourcing overseas M&As. We hope to help multinational enterprises to achieve more outstanding technology innovation performance through technology-sourcing overseas M&As in an intense global competitive environment.

The abilities to efficiently identify potential innovation profits and form an optimal post-merger strategy are important in evaluating overseas merger and acquisition (M&A) performances. The paper uses a global game with asymmetric payoff structure and multi-agent simulation method to analyze the optimal overseas post-merger strategy. We model three stages of the M&A processes: merger decision stage, post-merger integration stage, and technology innovation after M&A, to analyze how different resource similarity and resource complementarity of the two companies influence the degree of optimal post-merger integration and target autonomy as well as technology innovation profit after M&A. The agent-based simulation shows that in overseas M&As, resource similarity has a positive relation with integration and a negative relation with target autonomy; however, resource complementarity has the opposite effect. The negative interaction effect between resource similarity and complementarity will decrease the degree of integration. In high resource similarity and low resource complementarity M&As, a high integration degree and low target autonomy will maximize innovation profit, while for high resource similarity and high resource complementarity M&As, a medium integration degree and target autonomy is best for innovation profit. For low resource similarity and high resource complementarity M&As, a low integration degree and high target autonomy will be the best post-merger strategy. Model outputs are robust to variations of the parameters.

Outward foreign direct investment can affect developing, technology-receiving host countries mainly through tax revenue, technology spillover and the competition effect. With the consideration of these three effects of the outward foreign direct investment on host country, we develop a dynamic game model of interaction between foreign investors and host country from a dynamic perspective, to reveal the dynamic evolution mechanism of the sovereign risk faced by outward foreign direct investment. The result shows that: host governments usually give a specific tax holiday for outward foreign direct investors, and during the period of tax holiday investment decision of investors would be influenced by technology spillover effect, specifically, the greater the technology spillover the slower the growth of investment stock. Once the system reaches a stable state, the host country will impose a tax on multinational corporations. If the equilibrium tax rate of industries or regions which makes it easy to obtain technology spillover is high, then the equilibrium capital stock would be low.