The heterogeneous impacts of M&As on renewable energy firms’ innovation: Comparative analysis of China, the US and EU

The renewable energy sector is characterized by two key externalities that make government participation critical to technological innovation within the industry. This paper explores the country-specific heterogeneity of the impact of M&A on innovation in renewable energy firms from both theoretical and empirical perspectives, based on variability in the level of renewable energy China, the United States, and Europe. In this framework, we further explore the heterogeneous effects of domestic M&A and cross-border M&A on corporate technology innovation. The main empirical results of this paper show that: first, the M&A behavior of US renewable energy firms has a significantly higher effect on technological innovation than that of Chinese and European renewable energy firms; and second, the effect of cross-border M&A of Chinese and European renewable energy firms on innovation is significantly higher than the effect of domestic M&A on innovation, while the effect of cross-border M&A of US renewable energy firms on innovation is not significantly different from the effect of domestic M&A on innovation. These results are consistent with diminishing marginal returns on innovation from M&A activity.