A recent study by Tan, Zhang, Song, Zou, and Liao, published in PLoS ONE, explores the impact of serial mergers and acquisitions (M&A) on enterprises total factor productivity, with a focus on the mediating role of digital transformation. The research highlights how M&A is a strategic tool used by companies to expand their reach, enhance competitiveness, and boost productivity amid market competition. The study emphasizes the evolving nature of production factors, particularly the increasing significance of data as a new input in the business landscape.
The research delves into the concept of total factor productivity, which measures a firms efficiency in using its resources. It posits that M&A can significantly influence this productivity by integrating new technologies and processes, thus enabling companies to better leverage their assets. The study suggests that digital transformation is a critical mediator in this process, as it helps streamline operations, improve data management, and foster innovation, ultimately enhancing productivity.
Moreover, the study suggests that companies engaging in serial M&A activities are better positioned to implement digital transformation initiatives. This is because repeated M&A experiences provide firms with valuable insights and resources that facilitate smoother integration and adaptation to new digital tools. As a result, these enterprises can achieve greater productivity gains compared to those that do not undergo digital transformation or engage in fewer M&A activities.
Overall, the findings underscore the importance of digital transformation in maximizing the benefits of M&A. Businesses that strategically integrate digital technologies into their operations are likely to see improved productivity and competitiveness. The study provides valuable insights for companies considering M&A as a pathway for growth, highlighting the need to prioritize digital transformation to fully realize the potential productivity gains.