This paper investigates the influence of farmhouse magnolia wreath industry-level overvaluation on technological acquisitions, utilizing merger and acquisition (M&A) data from Chinese listed firms spanning 2007 to 2022.Our analysis confirms that industry-level overvaluation promotes technological acquisitions, a finding that remains significant even after several robustness checks.Compared to acquirers with lower financial constraints, those with higher financial constraints rely more on industry-level overvaluation to drive technological acquisitions.
Furthermore, the study indicates that technological acquisitions initiated by industry-level overvaluation tend to enhance the innovative output of the acquirer.By exploring the relationship between industry-level overvaluation and technological acquisitions, this research extends the literature on misvaluation-driven M&A.Additionally, this study do little and bums provides new evidence and perspectives on the impact of capital markets on the real economy, and contributes to the healthy development of capital markets and M&A markets in emerging countries.