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Digital M&A and firm productivity in China

Author

Listed:
  • Chen, Yifu
  • Wang, Liang
  • Ye, Yongwei
  • Tao, Yunqing

Abstract

Using data from mergers and acquisitions (M&A) among Chinese listed firms from 2012 to 2021, this paper explores the influences of digital M&A on firms’ total factor productivity (TFP) and the underlying mechanisms. Our findings reveal that digital M&A positively affect firms’ TFP, which still holds after a series of robustness tests. According to mechanism tests, we find that digital M&A enhance firms’ TFP through dual conduits: the refinement of the human capital structure within firms, and the escalation of firms’ investment in research and development (R&D). Further heterogeneous analysis show that the stimulating effect of digital M&A on firms’ TFP is more pronounced in highly competitive industries, in regions characterized by superior market development, and within non-state-owned enterprises.

Suggested Citation

  • Chen, Yifu & Wang, Liang & Ye, Yongwei & Tao, Yunqing, 2023. "Digital M&A and firm productivity in China," Finance Research Letters, Elsevier, vol. 58(PA).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pa:s1544612323006980
    DOI: 10.1016/j.frl.2023.104326
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    More about this item

    Keywords

    Digital M&A; Total factor productivity; Human capital; R&D Investment;
    All these keywords.

    JEL classification:

    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • G3 - Financial Economics - - Corporate Finance and Governance

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