This study explores whether firms effectively leverage knowledge from cross-border acquisitions to enhance innovation and firm performance. Cross-border mergers and acquisitions (M&A) are a strategic approach to gaining technological resources, accessing new markets, and building firm-specific advantages. This research analyzes post-acquisition innovation performance by examining factors such as patent output, research and development (R&D) expenditures, absorptive capacity, and previous acquisition experience. Key findings indicate that M&A can positively impact patenting but may reduce R&D spending, especially when acquirer and target innovation capabilities are complementary. Emerging market firms often use M&A to overcome resource limitations and integrate advanced technological competencies from developed markets. The study also highlights the critical role of absorptive capacity in moderating post-acquisition outcomes, enabling firms to exploit external knowledge effectively. Additionally, the internationalization of firms and institutional factors significantly influence the success of knowledge transfer and innovation gains. This research contributes to understanding the dynamics of global M&A, emphasizing the importance of strategic alignment, synergies, and absorptive capacity in achieving sustainable competitive advantage.
