A Study On The Effect Of Cross-border M&a On Markups

In cross-border competition,Chinese manufacturing enterprises have weak international competitiveness,and the markups of export enterprises is even lower than that of non-export enterprises.This not only increases foreign anti-dumping risks,but also leads to insufficient domestic consumption,resource and environmental conflicts,etc.A series of problems,therefore,increasing the markups in Chinese export enterprises is a major practical issue that needs to be studied urgently.This paper believes that a comprehensive understanding of the markups effect of cross-border mergers and acquisitions will help Chinese manufacturing enterprises to jump out of the "low-markups trap."Cross-border M&A is an effective way for Chinese companies to catch up with the market power of multinational companies in developed countries in a short period of time.By imitating and learning the technology and knowledge of advanced enterprises,enterprises can improve their innovation level,productivity,management efficiency and financial performance.Understanding the different paths of Chinese multinational manufacturing enterprises to the high-end manufacturing industry from the extensive and intensive margins of cross-border M&A will provide us with different analytical perspectives and correctly analyze the mechanism of cross-border M&A on the markups.This paper extends the one-dimensional analysis of cross-border M&A of multinational manufacturing enterprises to the theoretical analysis of the dual margin of cross-border M&A,introduces reverse technology spillovers and fixed cost changes,and uses the data from 2012 to 2017,from the perspective of the dual margin of cross-border M&A.The A-share listed manufacturing enterprise data and the Qingke private equity database data,the De Loecker&Warzynsik(2012)method is used to measure the enterprise markups,and the PSM-DID method is used to verify the cross-border M&A to the enterprise markups.Based on the influence and understanding of the relationship between the two,the GMM estimation method is used to modify the model to analyze the dynamic impact of the extensive and intensive margins of cross-border mergers and acquisitions of Chinese manufacturing enterprises on the markups of enterprises,so that they can not only compare cross-border mergers and acquisitions.The impact of the one-way analysis on the markups and the binary margin of cross-border M&A on the markups,clarifying the relationship between cross-border M&A and markups,and providing new opportunities for companies to increase the markups.The study finds that cross-border mergers and acquisitions have a negative impact on the markups of enterprises,but the lag effect of cross-border mergers and acquisitions can positively increase the markups of enterprises;the extensive margin can significantly improve the markups in the current and long-term;and the markups in intensive marginal is not significant increase in the current period,and has a significant positive effect in the long run;in contrast,the extensive margin of cross-border mergers and acquisitions is more intensive than the intensive margin;the reverse technology spillovers of cross-border M&As and fixed-cost changes play a mediating role in the impact of the dual margin of cross-border M&A on the markups of firms.This paper analyzes the impact of cross-border mergers and acquisitions on the markups of enterprises,and conducts a classification test for cross-border mergers and acquisitions with different motives,cross-border mergers and acquisitions of different host countries,and cross-border mergers and acquisitions of enterprises from different regions,and proposes different suggestions for different situations.Theoretically this thesis enriched the research on cross-border M&A and markups,and clarified the theory of market power of "cross-border M&A to reverse technology spillover/fixed cost change to markups,overcoming the unilateral consideration of extensive margin or intensive margin.In practice,it aims to help Chinese manufacturing multinational enterprises to obtain as high as possible reverse technology spillover,thus forming the benign development of transnational enterprises' external expansion,greatly increasing the markups of enterprises,and helping enterprises to occupy a favorable position in the re-division of global value chain.