How does integration affect industrial innovation through networks in technology-sourcing overseas M&A? A comparison between China and the US.

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Date: Jan. 2021
Publisher: Elsevier B.V.
Document Type: Report; Brief article
Length: 257 words

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Abstract :

Keywords Post-merger integration; Industrial innovation; Internal network; External network; Institutional comparison Highlights * Overseas M&A integration should match with resource similarity and complementarity. * Proper integration promotes industrial innovation through external network centrality. * Proper integration promotes industrial innovation through external structural holes. * Proper integration improves internal network cohesion which benefits network position. * Developed home-country institution strengthens the effect of overseas M&A integration. Abstract 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. Author Affiliation: School of Economics, Zhejiang University, 38 Zheda Road, Xihu District, Hangzhou 310027, China * Corresponding author. Article History: Received 9 April 2019; Revised 23 August 2020; Accepted 25 August 2020 Byline: Feiqiong Chen [2514254772@qq.com] (*), Huiqian Liu, Yuhao Ge

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Gale Document Number: GALE|A648491643