Assessment Of The Innovative Performance Induced By Cross-border Mergers And Acquisitions

As we all live in a time of economic globalization,many enterprises conduct international operations and enhance innovation ability through cross-border mergers and acquisitions.Because cross-border mergers and acquisitions(M&A) can fastly have access to overseas resources, brand, productivity, marketing channels and so on.Especially for the emerging economies,M&A in developed countries can also get advanced technology and patents,which will have an important impact on the level of innovation of emerging economies undoubtedly. Zhejiang Geely Automobile,a leader of China’s private automobile enterprises,fights for the mission of”create the safest, most environmentally friendly and most energy-efficient car, let Geely cars drive all over the world”.Zhejiang Geely Automobile has been developing very rapidly and getting continuous technological innovation in recent years.Especially in the March 28 th 2010,Geely purchase 100% of the shares and related assets(including intellectual property) of famous Swedish luxury car brand "Volvo" at a price of $ 1.8 billion,which arouse a hot debate.It remains to be tested whether this“snake swallow elephant”style of M&A can draw a lesson from the acquisition of Hummer,whether Geely obtain overseas advanced technology to improve itself innovation ability and internationalize its brand through purchasing luxury car brand "Volvo". Furthermore,it need to be explored in depth what cause the changes in the innovation performance of enterprise after M&A.This paper proposed six hypotheses based on the efficiency theory, knowledge-based theory, comparative advantage theory and other theories at first.Then I take 10 years of 2003 to 2012 as the time window,select Geely Automobile and other five private car companies as the research object to establish a mathematical model. This paper put Geely Automobile into the treatment group,other private car companies into a control group and compare the two sets of data by Propensity Score Matching method(Nearest Neighbor Matching,1 to 1 and 1 to 2)and the Fixed Effects Model method. The result eventually found that cross-border mergers and acquisitions have a positive impact on the innovative performance of our companies.What’s more,firm size, government support and other_shareholder play a positive role in innovative performance.On the contary, the share of largest shareholder has a negative impact on the innovative performance.Due to the fact that overall strength of Chinese private car companies are relatively weak in this extremely complex external environment,the absorb ability and R&D investments are not significant to innovation performance.