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The crowding‐out effects of innovation information disclosure on peers' innovation: Evidence from innovation‐driven M&As in China

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  • Zhangfan Cao
  • Chen Hua
  • Yan Tong
  • Xi Wang

Abstract

This 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.

Suggested Citation

  • Zhangfan Cao & Chen Hua & Yan Tong & Xi Wang, 2023. "The crowding‐out effects of innovation information disclosure on peers' innovation: Evidence from innovation‐driven M&As in China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(5), pages 4883-4908, December.
    • Handle: RePEc:bla:acctfi:v:63:y:2023:i:5:p:4883-4908
    DOI: 10.1111/acfi.13165
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