Does Technological Intensity Matter for Global Cross-Border Mergers and Acquisitions in Manufacturing, 1998–2018?

Despite being a key feature of the globalising world since the 1980s, the patterns and relationships between acquirer and target firms in cross-border mergers and acquisitions (M&As) have only gained attention in recent years. By examining the data between 1998 and 2018 through multinomial logistic regression models, this paper investigates the goodness of match on technological intensity (the closeness of technological capabilities) between acquirer and target firms and the effects of geographical, cultural and institutional proximity in global cross-border M&As in manufacturing sectors. Our results suggest that firms are more likely to acquire overseas counterparts with similar levels of technological intensity in manufacturing. Moreover, geographical proximity is significant in the M&As of target firms in low-tech and medium-low-tech sectors, while cultural and institutional proximity matter for cross-border M&As among medium-high-tech and high-tech firms. High-tech acquirer firms in advanced economies tend to acquire their high-tech counterparts located in larger economies, while technological intensity is more important for high-tech acquirer firms based in non-advanced economies, as the closeness of technological knowledge with potential target firms allows them to generate potential synergies and overcome cultural gaps and foreignness in distant host countries.