In emerging economies, mergers and acquisitions (M&A) have increasingly become a primary means for firms to acquire external knowledge and promote innovation. Nevertheless, how M&A translates into innovation performance is not yet fully explored. Drawing on data from ChiNext Board listed firms in China over the period 2010–2025, this study examines the effect of M&A on firm innovation, with a particular focus on the mediating role of technological synergy. Using PSM-DID approach, we find that M&A contributes to significant gains in both innovation output and innovation conversion efficiency, results that remain consistent across a battery of robustness checks. Mechanism analysis identifies technological synergy as an important pathway through which M&A drives innovation gains, an effect that persists over several periods following the transaction. The heterogeneity analysis yields additional insights, showing that the positive innovation effects of M&A are amplified for acquisitions of mature-stage target firms and for transactions occurring in industries with less intense competitive pressure. These findings offer novel theoretical insights into the mechanisms linking M&A to firm innovation outcomes and provide empirical guidance for firms aiming to pursue synergy-oriented M&A and improve innovation resource allocation.
Liu et al. (2026) studied this question.