Dose digital services trade openness impact cross-border mergers and acquisitions? Evidence from China

Based on data from Chinese A-share listed companies between 2014 and 2021, this paper examines the impact of digital services trade openness on the successful completion of firms' cross-border mergers and acquisitions (M&As). Our findings show that digital services trade openness significantly improves the success rate of cross-border M&As, and this effect is more pronounced for firms that initiate cross-industry M&As. Possible mechanisms include increasing informational advantages and optimizing corporate risk-taking. Further analysis reveals that digital services trade openness generates a positive market reaction to M&A announcements. This study contributes to a deeper understanding of cross-border M&As in the digital economy and provides far-reaching policy implications for emerging economies seeking to promote gradual liberalization and encourage firms' international expansion.