The Impact of Corporate Digitalization on Cross-border Mergers and Acquisitions Performance in Chinese Listed Companies

Abstract

Under the influence of the “going out” strategy and the Belt and Road Initiative, China has been accelerating its process of globalization. Based on a sample of 123 cross-border mergers and acquisitions (M&A) cases launched by Chinese listed companies from 2012 to 2019, this paper empirically studied the impact of corporate digitalization on cross-border M&A performance. The regression results showed that corporate digitalization promoted both short-term and long-term cross-border M&A performance, especially when the acquiring company was a high-tech company. In non-stateowned enterprises (non-SOEs), corporate digitalization promoted short-term cross-border M&A performance more significantly, while in SOEs the positive impact was more significant on long-term cross-border M&A performance. Furthermore, internal control quality strengthened the role of corporate digitalization on short-term performance of the acquiring company after cross-border M&A, while it negatively moderated the correlation between corporate digitalization and long-term performance of the acquiring company after cross-border M&A. This study provided some implications for firms on how to promote their cross-border M&A performance and references for the government’s innovation encouragement policy and the “going out” strategy.

Keywords

• corporate digitalization
• cross-border m&a
• financial performance
• internal control