Abstract:  The effect of mergers and acquisitions (M&As) on technological innovation performance has not reached a conclusion. 1232 listed companies in China′s manufacturing industry from 2006 to 2016 were divided into three groups: never merged before, non-technological M&As and technological M&As. Then, the non-classical PSM-DID（Propensity Score Matching-Difference in Differences）  model is adopted to analyze the path and effect of three groups on the technological innovation performance. The result shows that non-technological M&As cannot improve enterprise′s technological innovation performance. The hypothesis that technological merger and acquisition can improve enterprise′s technological innovation performance is not tenable either. Despite of that, enterprises can weaken this negative effect by deepening economic ties with target companies and expanding their knowledge breadth. This study distinguishes the differences in the mechanism of technological innovation performance between technological and non-technological M&As and analyzes the main effects of innovation capabilities and acquirers′ characteristics on innovation output, providing effective ways to enterprises′ sustainable profit maximization.

Key words: acquisitions, technological acquisitions, knowledge base, innovation performance