M&As and the value chain of host countries in the “belt and road” — Based on path test of technological innovation

Mergers and acquisitions (M&As) are crucial for capital concentration and rapid enterprise expansion. Most countries along the “Belt and Road” are developing economies, facing the dilemma of “low-end locking” of the global value chain. Utilizing data on global value chain participation of countries along the “Belt and Road” from 2003 to 2018, obtained from the United Nations Conference on Trade and Development, this study examines the impact and mechanisms of M&As on the global value chain participation of host countries along the “Belt and Road.” Our findings are as follows: (1) M&As, primarily foreign, exert a significant inhibitory effect on the improvement of value chain participation in host countries along the “Belt and Road.” This conclusion holds even after excluding abnormal data and considering endogeneity issues; (2) the inhibitory effect of M&As on enterprises has cyclical differences in the economy and heterogeneity among countries, particularly evident after the 2007 global subprime crisis. This effect is less pronounced in developed countries along the “Belt and Road” than on developing countries; and (3) M&As hinder the rise of the host country's global value chain by restraining the host country's government intervention and advancements in basic science and technology.