The Effect Of Product Similarity On Technology Innovation Of The Acquisition

The development of manufacturing level is the embodiment of national comprehensive strength.In 2015,the central economic work conference proposed that we should do a good job in cutting overcapacity,de-stocking,de-leveraging,cutting costs and addressing weak links.New opportunities are emerging for the transformating and upgrading of manufacturing industry.As an effective way to realize the scale expansion,optimize resource allocation,transformate and upgrade of industrial structure and achieve all-round diversification strategy,merger and acquisition activity is increasingly adopted by enterprises.According to the data,in 2015,there were 2249 manufacturing merger and acquisition events in China,accounting for 39%of the total merger and acquisition events in the whole industry,ranking first in all industries.However,whether merger and acquisition activity can really improve the level of technology innovation of manufacturing industry,and what factors affect the level of technology innovation of manufacturing industry,these problems need to be further studied.To solve these problems,based on the existing research results,in this paper we select the merger and acquisition events of the manufacturing listed companies from 2003 to 2012 as samples,select the main business field of the financial statements of the two companies in corresponding year to construct the text vector by using the cosine similarity theorem.We calculate the vector angle cosine values to define the product similarity of the two companies in mergers.Through regression analysis to research,we find the main factors which affect the level of technology innovation of the enterprises in manufacturing industry.The results show that the enterprises with similar product similarity are more likely to be merged,and the higher the similarity of the products,the merger are more likely to happen.The product similarity is positively correlated with the acquisition performance of the technology innovation,the higher product similarity is,the better performance of the technology innovation is,and this relationship is especially significant in the third year after the merger.The last chapter,according to the results of empirical study,we provide corresponding suggestions as the references for improving the level of technology innovation of China's manufacturing industry,which can improve the efficiency of merger and acquisition activities and promote the steady development of merger and acquisition transactions.