Abstract: As digital economy has become a new engine of global economic growth, under the pattern of "double cycle" and innovation-driven development strategy, the digital economy outbound investment cooperation represented by digital cross-border M&A provides an effective way for Chinese enterprises to seek digital means to enhance the innovation ability and create new competitive advantages. Taking the retail industry, which is the most active in digital transformation and digital M&As, as the research object, this paper adopted the data of A-share listed retail enterprises from 2011 to 2022 to characterize innovation quality by identifying the amount of technology patent citations and knowledge width, and empirically tested the effect and mechanism of digital cross-border M&As on enterprises′ high-quality technological innovation. It was found that digital cross-border M&As significantly promote the retail enterprises to carry out high-quality technological innovation, and this conclusion is still valid after the robustness test. The heterogeneity analysis showed that the promotion effect of digital crossborder M&A on innovation quality is more obvious in non-state-owned enterprises, eastern regions and enterprises with low M&A premium. Further investigation of the impact mechanism showed that digital cross-border M&A mainly promotes the improvement of technological innovation quality by improving the circulation efficiency of enterprises, while overly centralized supply chain relations will weaken the positive impact of digital cross-border M&A on innovation quality. This study will not only provide new empirical evidence for enterprises to explore digital transformation, but also provide beneficial enlightenment for enterprises to carry out innovation activities.

Key words: digital cross-border M&A, high-quality technological innovation, retail firm, distribution efficiency, supply chain relationship