Existing studies focus on whether cross-border M&A can improve innovation quality, but lack of attention to how cross-border M&A has differentiated impact on innovation quality. The deconstruction of the relationship between cross-border M&A and innovation quality in innovation management literature still remains at the issue of whether cross-border M&A can improve innovation quality, and no consensus has been reached. The sharp contrast between the contradictory research conclusion and the hot wave of cross-border M&A in the industry indicates that the academic community urgently needs to shift its research focus from “whether to improve” to “how to improve”, that is, to clarify the internal mechanism of cross-border M&A affecting innovation quality.

The narrow research perspective leads to theoretical deficiencies in existing literature in revealing the impact of cross-border M&A on innovation quality. Firstly, existing research regards cross-border M&A as homogeneous and neglects exploring the differential innovation effects of different types of cross-border M&A. The existing literature that measures cross-border M&A based on transaction quantity is too simplified and cannot present the heterogeneity of M&A transactions, which hinders a deeper analysis of the impact of cross-border M&A innovation quality. Secondly, existing research focuses on analyzing whether cross-border M&A can affect the technology dimension of innovation quality, while neglecting the exploration of the market dimension. Looking at the literature on innovation quality, it is found that the characterization of innovation quality should be based on both technology and market dimensions, and there are differences in connotation and measurement between the two dimensions. Thirdly, existing research has focused on testing whether “can be improved”, resulting in a lack of interpretation for boundary conditions. Only a few literature have revealed the moderating effects of technological relevance, institutional distance, and intellectual property protection from the perspective of pre-merger factors, and have not addressed the contingency scenarios that affect the acquisition and exploitation of knowledge in the process of M&A integration.

This paper divides cross-border M&A into exploratory M&A and exploitative M&A based on the perspective of ambidextrous learning, divides innovation quality into technology quality and market quality based on technology and market dimension, empirically tests the differentiated effects of two cross-border M&A behaviors on different dimensions of innovation quality, and explores the moderating effects of integration depth and knowledge depth based on knowledge management theory. Exploratory M&A aims to establish new competitive advantages, which is a long-distance, out of domain knowledge search characterized by exploration, change, experimentation, and innovation; exploitative M&A aims to leverage own technological advantages, which is a local, domain specific knowledge search characterized by refinement, execution, efficiency, and selection. Technology quality represents the technological value or impact of innovation achievements, while market quality represents the market value or impact of innovation achievements.

This article collects conceptual data on exploratory M&A, exploitative M&A, technological quality, market quality, etc. through a questionnaire survey. The sample comes from the global M&A transaction analysis database (Orbis M&A) in the BvD series from 2010 to 2023. It is found that exploratory M&A helps to improve technology quality, exploitative M&A helps to improve market quality, and the impact of cross-border M&A on innovation quality depends on the post M&A knowledge management process. Firms with deep integration (high knowledge acquisition degree) and deep field knowledge (strong knowledge exploitation ability) can benefit more from cross-border M&A.