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The Level of Digital Development in the Host Country and M&A Performance

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  • Kun Liu
  • Jingyu Huang
  • Xiao Su
  • Na Guo
  • Hanyu Xiao

Abstract

Economic globalization is increasing, and an aspect of this trend is the increasing frequency of cross‐border mergers and acquisitions (M&As). As the world has entered the era of digital development, the efficiency of information communication has doubled. However, whether digital development can help improve the performance of cross‐border M&A remains to be verified. Based on the entropy method, we constructed an index system for national digital development and analyzed the cross‐border M&A events of Chinese listed companies from 2010 to 2019. Through empirical analysis, the study finds that digital development in the host country improves the performance of cross‐border M&A. This effect is especially pronounced when the knowledge complexity of the M&A is inferior, or the M&A occurs in the same industry. We then analyze the mechanism of the impact of the host country’s level of digital development on improving firms’ M&A performance under Dunning’s OLI framework and the M&A transaction cost perspective, respectively. These findings enrich the theory of international investment and offer practical value to enterprises engaged in cross‐border​ M&A.

Suggested Citation

  • Kun Liu & Jingyu Huang & Xiao Su & Na Guo & Hanyu Xiao, 2025. "The Level of Digital Development in the Host Country and M&A Performance," Discrete Dynamics in Nature and Society, John Wiley & Sons, vol. 2025(1).
    • Handle: RePEc:wly:jnddns:v:2025:y:2025:i:1:n:5550724
    DOI: 10.1155/ddns/5550724
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    References listed on IDEAS

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