From transaction to co-creation in Geely’s acquisition of Volvo Cars: impact on innovation output and market performance

The last decade has witnessed numerous cross-border mergers and acquisitions (M&As) undertaken by emerging market multinational enterprises (EMNEs). Only a few EMNEs achieve co-creation with the acquired partner by mobilising and enhancing their knowledge resources. This paper centres on how post-M&A co-creation is achieved and what its impacts are on the innovation output and market performance of firms. We employed an in-depth longitudinal case study of the acquisition of Volvo Cars by Geely, supplementing the case study with patent portfolio analysis and business analysis. We link innovation and cross-border M&A literature to address co-creation post-M&A. The findings showed how the high level of freedom given to the acquired firm allowed it to preserve innovation capacity and, later, successfully integrate with the acquirer. The patent portfolio analysis demonstrates that the firms’ innovation outputs became more similar over time, demonstrating the successful knowledge integration achieved in the case.