Global value chain position, firm innovation, and cross-border mergers and acquisitions performance

With the global value chain (GVC) emerging as the primary mode of international industrial division, occupying a high-end position within the GVC has become a significant indicator of a country’s industrial development and upgrading success. For emerging markets, which are currently undergoing a reconstruction of the global industrial chain, the ability to achieve innovative transformation and enhance enterprise performance through reverse cross-border mergers and acquisitions (M&As) in high-end GVC industries is crucial for promoting industrial development and upgrading. Based on the cross-border M&A cases of Chinese listed companies from 2007 to 2019, this paper constructs an empirical model by subdividing the GVC status of the industries in which the M&A enterprises and the acquired enterprises are located and finds that the more the GVC status of the industry in which the acquired enterprise in the host country is located is higher than that of the industry in which the M&A enterprise is situated in the home country, the more it can inspire the M&A enterprises in the home country to promote the improvement of the performance of cross-border M&A. The enhancement is more pronounced in the case of the home country’s acquiring firms with stronger innovation capacity. This mechanism, although lagging, is sustainable and robust. Further distinguishing the heterogeneity of the sample, the above empirical findings and moderating mechanism are more obvious when the M&A firms are in a capital market with good performance, belong to non-state-owned enterprises, and are in a tight financing environment. This conclusion can provide a decision-making reference for emerging markets to optimize the layout of overseas investment, guide investment, and promote enterprise innovation and transformation.