The Impact of US Technology Blockade on Chinese High-tech Cross-border M&A

美国技术封锁对中国技术型跨境并购的影响

Abstract

This paper explores the impact of USA technology blockade on China's technical cross-border mergers and acquisitions (M&A) from third-party economies by using the difference-in-difference (DID) model based on the SDC M&A database. We find that USA technology blockade against China has increased China's efforts to implement technological cross-border M&A in third-party economies. The mechanism analysis shows that this is the result of the combination of demonstration effect decreasing China's technological M&A and substitution effect which encouraged that in third-party economies highly alternative or closely linked to China's high-tech sector. In addition, the political and economic relationship between the host country and USA is not a key factor of the effect we interested. Heterogeneity analysis finds that the medical and telecommunications and software service fields are positively stimulated by the USA technology blockade, but the energy fields are the opposite.