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Does the failure of corporate mergers and acquisitions affect innovation efficiency

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  • Liu, Yujie
  • Wang, Yiwei

Abstract

This study examines the effects of failed corporate mergers and acquisitions (M&A) on the innovation activities of manufacturing firms. It analyses the mechanism behind this impact by drawing on relevant literature and theories. The analysis is conducted using panel data from 2382 A-share listed manufacturing firms between 2009 and 2022. The findings indicate that following the collapse of corporate mergers and acquisitions (M&A), manufacturing firms have decreased their investment in innovation, resulting in ineffective innovation outcomes and diminished innovation capacities. Furthermore, the research reveals that media attention and ESG performance act as mediators in the relationship between M&A failure and the decline of innovative capability. This paper enhances the study on the efficiency of innovation in manufacturing companies and offers evidence to support the improvement and execution of unsuccessful mergers and acquisitions. Policy makers should prioritize the significance of innovation capability during mergers and acquisitions (M&As) and implement suitable measures to safeguard and enhance innovation capability. Additionally, they should effectively handle media attention and boost environmental, social, and governance (ESG) performance. Implementing this strategy will enhance the efficacy of Mergers and Acquisitions (M&As) and alleviate the adverse effects on organizations' innovative capacities.

Suggested Citation

  • Liu, Yujie & Wang, Yiwei, 2025. "Does the failure of corporate mergers and acquisitions affect innovation efficiency," International Review of Financial Analysis, Elsevier, vol. 97(C).
    • Handle: RePEc:eee:finana:v:97:y:2025:i:c:s1057521924007531
    DOI: 10.1016/j.irfa.2024.103821
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    References listed on IDEAS

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    1. Yiding Wu & Qing Liu & Qiming Guo, 2025. "Can Vertical Mergers and Acquisitions of Renewable Energy Enterprises Enhance Supply Chain Resilience?—Empirical Verification Based on Multi-Period Difference-in-Differences Model," Sustainability, MDPI, vol. 17(7), pages 1-21, April.

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