| Summary: | Existing literature tends to treat enterprises as a whole when measuring government intervention. However, in Chinese region-specific institutional development, ultimate control (i.e., local government) tends to control multiple enterprises. This paper considers the enterprises controlled by the same ultimate controller as a portfolio, which is used to measure government intervention by comparing the differences of the enterprises in the portfolio. This paper uses the data of Chinese listed local state-owned enterprises (LSOEs). and we assess whether local state ownership benefits or offsets LSOEs’ cross-border mergers and acquisitions (CBM & A) activities. We propose a new measurement of government intervention to explain the mechanisms through which government influences the cross-border mergers and acquisitions of local SOEs. The experimental results show that government intervention and region-specific marketization institutional development negatively moderate the effect of government internationalization subsidies and government intervention on CBM & A separately. However, government internationalization subsidies, government intervention, and region-specific marketization enhance the CBM & A effect of state ownership separately. This study explores the benefits of government involvement in local SOEs. The value of this paper is to provide a novel perspective, including the intermediary effect of government intervention and the market environment.
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