Title: From Acquisitions to Hiring: Firms’ Strategic Response to Cross-Border Knowledge Acquisition Barriers

Speaker: Zhang Ray, Associate Professor, Beedie School of Business, Simon Fraser University (Canada); Ph.D. Supervisor. His research fields include corporate governance, climate reputation, securities regulation and enforcement, bank loan contracts and auditing, and executive personality assessment. He has currently published more than 10 papers in international top journals such as "Journal of Financial and Quantitative Analysis", "Review of Accounting Studies", "Management Science", "Journal of Business Ethics" and "Journal of Business Finance & Accounting". He has also received a number of external grants: SSHRC Insight Development Grant (Independent Applicant) - 74,950 (2023-2026); CPABCEF Research Grant: $10,000 (2018-2020).

Abstract: This study examines how firms strategically respond to geopolitical barriers restricting cross-border knowledge acquisition, focusing on the U.S. introduction of the Foreign Investment Risk Review Modernization Act (FIRRMA) in 2018, which constrained Chinese firms’ acquisitions of US firms, as a natural experiment. Leveraging novel job posting and patent data from approximately 3,500 Chinese listed firms, we find that firms in technology sectors affected by FIRRMA increased their hiring of foreign-trained researchers as a strategic substitute to cross-border acquisitions. We also find that these firms experienced a decline in their innovation output after FIRRMA. Finally, we find that firms that engaged more intensively in foreign-trained hiring experienced a substantially smaller innovation decline compared to firms that did not, suggesting hiring foreign-trained talent partially mitigated the negative impact of FIRRMA’s acquisition constraints. These findings highlight international hiring as a viable—though less efficient—alternative to cross-border acquisitions for sustaining innovation amid tightening geopolitical and regulatory constraints.

Date & time: 27 June 2025, 10:30

Venue: B423, Zhixin Building, Central Campus, Shandong University