Does Cultural Distance Promote Innovation In Chinese Overseas M&A Enterprises

Since the 1990s,with the acceleration of economic globalization,overseas mergers and acquisitions have developed rapidly,which has had an extremely extensive and far-reaching impact on the world economy.Since China proposed the "Going Global" and "the Belt and Road Initiative" strategies,the use of overseas mergers and acquisitions to obtain "reverse technology spillovers" to enhance innovation has become one of the main reasons for Chinese companies to participate in cross-border mergers and acquisitions.However,with the expansion of overseas mergers and acquisitions,Chinese enterprises continue to suffer losses in the process of "going out",and technological innovation has not seen a significant improvement.At the same time,cross-border mergers and acquisitions must involve the conflict and fusion of two cultures.Whether cultural distance promotes innovation of cross-border mergers and acquisitions has been the focus of debate in the academic and business circles.However,the existing literature often studies cultural distance as a single indicator.Different dimensions of cultural distance are different in different situations,ignoring the "asymmetry" and "non-equivalence" of cultural distance.In order to better understand the effect of cultural distance on the innovation of Chinese overseas M&A enterprises,this article attempts to decompose the various dimensions of cultural distance,subdivide the role of specific dimensions of cultural distance and the "direction" of cultural distance,from the "deficit" and "Supply" explores the influence of cultural distance on innovation of Chinese overseas M&A companies.On the basis of sorting out the previous research literature,this article first proposes theoretically that the transmission path of cultural distance affecting the innovation of Chinese overseas M&A enterprises is transfer digest integration utilization.Secondly,construct the dimensional difference index,combined with the data of Chinese A-share listed companies and participated in overseas mergers and acquisitions from 2008 to 2019,to empirically test the impact of cultural distance on the innovation of Chinese overseas mergers and acquisitions,and to study the effect of cultural distance on the innovation of overseas mergers and acquisitions from the perspective of multicultural dimensions.At the same time,the moderating effects of the nature of enterprise ownership and economic freedom are discussed,and the heterogeneity test is carried out on the sub-samples.This article finds that: First,cultural distance inhibits the innovation of Chinese overseas M&A companies,that is,the greater the cultural distance,the lower the R&D investment and R&D output of Chinese overseas M&A companies.Secondly,the power distance difference and the long-term-short-term orientation difference promote the R&D investment and R&D output of Chinese overseas M&A enterprises out lower.Collective-individualism differences,uncertainty avoidance differences and indulgence and restraint differences have inhibitory effects on the R&D investment and R&D output of Chinese overseas M&A companies,namely the collective-individualism differences,uncertainty avoidance differences and indulgence and restraint differences between China and the host country.The larger the value,the lower the R&D investment and R&D output of Chinese overseas M&A enterprises.The difference in rigidity and flexibility does not affect the R&D investment and R&D output of Chinese overseas M&A companies.Thirdly,the nature of enterprise ownership effectively alleviates the inhibitory effect of cultural distance on the innovation of Chinese overseas M&A enterprises,while the moderating effect of economic freedom on the influence of cultural distance on the innovation of Chinese overseas M&A enterprises is not obvious.Finally,the sample is divided into developing countries and developed countries according to the level of development,and Asia and other regions according to the plate.The results show that cultural distance has a greater inhibitory effect on the innovation of Chinese overseas M&A enterprises whose host countries are developed countries and other regions.These conclusions not only enrich the research on cultural distance and the innovation of Chinese overseas M&A enterprises,but also provide useful policy design for promoting the innovation of Chinese multinational M&A enterprises.