Impact of Chinese cross-border outbound M&As on firm performance: Econometric analysis using firm-level data

•The effects of Chinese outbound M&As on firm performance are quantitatively examined.•The sales, productivity, and tangible and intangible assets increase after M&As.•The R&D intensity remains the same after M&As.•Chinese firms achieve their intended goals of outbound M&As.

Chinese cross-border outbound mergers and acquisitions (M&As) have been expanding rapidly since the mid-2000s with target firms in developed countries. The primary motives for such M&As are expansion into new markets and sourcing of knowledge and strategic assets. This study is the first attempt to examine the effects of Chinese outbound M&As on firm performance by applying propensity score matching estimations to a large set of firm-level data. We find that the sales, productivity, and tangible as well as intangible assets of the acquiring firms increase substantially after M&A transactions, which suggest that Chinese firms on average achieve their intended goals of outbound M&As. Further, outbound M&As do not increase research and development (R&D) intensity, implying complementarity, rather than overlapping, between R&D activities of the acquiring and acquired firms.