Does Domestic Market Integration Enhance Firms’ Propensity for Overseas M&A?

The integration of the domestic market leads to a stable and efficient business environment and a smooth domestic large-scale circulation, which is the necessary foundation for enterprises to achieve high-quality “going global” and participate in international competition. Based on the database of Chinese listed companies and matching the global greenfield investment database of fDi Markets and the global merger and acquisition transaction analysis database of BvD-Zephyr, the impact of domestic market integration on enterprises’ cross-border merger and acquisition tendencies was explored from both theoretical derivation and empirical testing perspectives. Research results show that domestic market integration has a significant positive impact on enterprises’ cross-border merger and acquisition tendencies; mechanism analysis results indicate that reducing financing constraints and increasing risk-taking levels are important mechanisms by which domestic market integration enhances enterprises’ cross-border merger and acquisition tendencies; heterogeneity analysis shows that for non-state-owned enterprises, industries with lower industry concentration, and host countries with lower economic development levels, the impact of domestic market integration on enterprises’ cross-border merger and acquisition tendencies is more significant.