Political Embeddedness and Post-Acquisition Innovation in MNEs: The Role of Experiential Learning

Political embeddedness has been shown to influence firms’ innovation and internationalization. However, its impact on acquirers’ innovation performance following cross-border acquisitions remains underexplored. Drawing on the resource dependence theory (RDT) and the experiential learning perspective, this study investigates how political embeddedness affects innovation performance after cross-border acquisitions and examines the moderating role of firm-level experiential learning. We further argue that this moderating effect is strengthened when top management team (TMT) members possess greater international experience and cognitive diversity. Using a dataset of Chinese cross-border acquisitions between 2010 and 2020, our findings confirm that political embeddedness negatively affects post-acquisition innovation performance, but that firm- and TMT-level experiential learning jointly mitigate this effect. This study contributes to the literature by highlighting the complex nature of experiential learning as a mechanism through which politically embedded firms can improve their innovation in cross-border acquisitions.