Estimation on the assimilating and alienating effects of Chinese enterprises’ overseas M&A on the home country’s technology progress: an empirical study based on the data of China

PANG Lei1,2 ZHU Tong3

(1.School of Economics and Management, Yunnan Normal University)
(2.Post-doctoral Research Station of Theoretical Economics, Yunnan University)
(3.Institute of International Economics, School of Economics, Nankai University)

【Abstract】This paper utilized overseas M&A data of 1205 Chinese enterprises from the BVD database Zephyr from 1990 to2016 to study the influences of Chinese enterprises ’overseas M&A on their home country ’s technology progress. The results show that the home country’ s technology progress stems from its domestic R&D investment, human capital stock, and enterprises’ reverse technology spillover effects from overseas M&A which takes forms of reverse R&D capital overflow and reverse human capital overflow. Meanwhile, the home country’s R&D investment and human capital stock respectively set a high threshold and a low threshold for enterprises’ overseas M&A. When the overseas M&A exceeds the threshold of R&D investment, the home country’s overseas M&A enterprises learn and imitate from the targeted enterprises, and then assimilate their advanced technology. On this occasion, the number of enterprises’ overseas M&As is a monotonically increasing function of their home country’s technology progress. On the contrary, when it does not exceed the threshold, their home country will alienate or exclude the absorption of the targeted enterprises’ advanced technology due to the large technology gap. On this occasion, with the increasing number of enterprises’ overseas M&A, the alienating effect it casts on the home country’s technology progress will be continuously strengthened. In a similar way, it shows an assimilating effect before the overseas M&A exceeds the human capital stock threshold, while it shows an alienating effect after exceeding this threshold.

【Keywords】 overseas M&A; home country’s technology progress; assimilating effect; alienating effect;

【DOI】

【Funds】 The National Social Science Fund of China (18BJL097) Applied Basic Research Youth Project of Yunnan Province of China (2018FD019)

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(Translated by SHEN Meilin)

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This Article

ISSN:1002-4670

CN: 11-1692/F

Vol , No. 12, Pages 121-135

December 2019

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Article Outline

Abstract

  • Introduction
  • 1 Literature review
  • 2 Theoretical transmission mechanism of enterprises’ overseas M&A and the home country’s technology progress
  • 3 Empirical analysis of the reverse technology spillover of Chinese enterprises’ overseas M&A and the home country’s technology progress
  • 4 Conclusion and countermeasure suggestion
  • References