How relative technological size affects innovation performance of cross-border technology M&A enterprises: a configuration perspective

Abstract

ABSTRACT Cross-border technology mergers and acquisitions (M&As) are critical strategic decisions for emerging multinational enterprises (EMNEs) seeking to gain competitive advantage. While previous research has examined the net effect of relative technological size on the innovation performance of EMNEs, their theoretical hypotheses and empirical results have been inconsistent. These studies fall short in explaining how relative technological size enhances innovation performance under conditions of acquirer knowledge absorptive capacity (comprising knowledge base and R&D investment) and macro-institutional contexts (comprising host country institutional quality and diplomatic relations). Utilising a sample of 44 listed firms in mainland China from 2008 to 2018, and employing the fuzzy-set qualitative comparative analysis (fsQCA) approach, our research reveals the relationship between different configurations of these influencing factors and the innovation performance of EMNEs. Our findings suggest that the mechanism by which relative technological size affects innovation performance is contingent upon the conditions of knowledge absorptive capacity and macro-institutional contexts.