A Study On The Impact Of Cross-border Mergers And Acquisitions Of Language Service Firms On Firm Performance

Cross-border M&A is an important form of international direct investment in today’s globalization process.Since the opening to the outside world in the last century,Chinese companies have gradually joined the wave of global cross-border M&A,and the number and amount of M&A have been increasing.The language service industry is an emerging industry in China,especially with the development of a large number of Chinese companies going global and the "One Belt,One Road" after 2013,Chinese language service companies are using cross-border M&A as a strategy to achieve different strategic goals and improve their business performance.The study examines cross-border M&A by language service firms as a strategy to achieve different strategic goals and improve business performance.Through an empirical study of the performance of cross-border M&As of language service firms,we evaluate the impact of cross-border M&As on firm performance and propose countermeasures based on the findings.The study first introduces the concepts and literature review related to cross-border M&A and firm performance of language service firms,and then examines the current situation of global language service firms on this basis,summarizing them into five stages of development,followed by a comparative analysis of firm performance-related indicators,using the Zephyr database and WRDS database to select seven U.S.language service firms from 2000 to 2021 The 162 cross-border M&A events of seven U.S.companies from 2000 to 2021 were selected as research samples through Zephyr database and WRDS database,and the relationship between cross-border M&A variables,industry-relatedness variables and the number of existing M&As with firm performance was analyzed empirically through fixed-effects models,and finally robustness tests were conducted through lagged explanatory variables,and the data were divided into pre-New Crown epidemic and post-New Crown epidemic for heterogeneity analysis.Based on the regression results,the following conclusions were drawn: cross-border M&As can bring improvements in corporate performance for language service firms;cross-industry M&As are beneficial to the performance of language service firms;the higher the number of M&As,the better the cross-border M&As performance of language service firms;the larger the size of the firm,the lower the cross-border M&As performance of language service firms;and the new crown epidemic brought crisis and turnaround.Finally,national-level and firm-level recommendations are proposed based on the empirical findings.The national level should encourage reasonable cross-border M&As of language service firms;an information system for cross-border M&As in China should be constructed;and a scientific evaluation system should be established to limit blind same-sector M&As of language service firms.At the enterprise level,language service firms should increase training on cross-border M&A;seek cross-industry M&A to achieve diversified development;and actively summarize M&A experiences and formulate M&A plans.