Affiliation:
1. Nottingham University Business School China University of Nottingham Ningbo Ningbo China
2. School of Accounting Southwestern University of Finance and Economics Chengdu China
3. School of Management and Economics Beijing Institute of Technology Beijing China
Abstract
AbstractThis study investigates the impact of rivals' announcements of innovation‐driven mergers and acquisitions (M&As) on focal firms' ex‐post corporate innovation performance. Exploiting a hand‐collected dataset of Chinese listed firms from 2011 to 2018, we find that focal firms file fewer patents after rivals' announcements of innovation‐driven M&As. Further analyses show that focal firms become more conservative and hold more cash when rivals intend to obtain innovation resources through M&As. We find that such crowding‐out effects are more pronounced for focal firms that are more financially constrained, those facing higher competition, those whose rivals are industry leaders, and those operating in traditional industries.
Funder
Fundamental Research Funds for the Central Universities
National Natural Science Foundation of China
Subject
Economics, Econometrics and Finance (miscellaneous),Finance,Accounting