Purpose The purpose of this paper is to examine the effects of cross-border mergers and acquisitions (M&As) by firms in the emerging marketing on stock market cumulative abnormal returns (CARs). This research focuses on the acquiring firms in emerging markets and broadens the existing scope which highlights the M&As by firms in developed countries. Design/methodology/approach Regarding the controversial argument on the effect of cross-border M&As, the authors introduce a resource-based theory to explain the motivation of M&As by Chinese firms, conduct an event study analysis of 472 international acquisitions by Chinese firms from 2010 to 2015 and indicate cross-border M&As as a positive signal in the stock market. Findings The results reveal that cross-border M&As result in significantly positive CARs in a short term for the acquiring firms listed in mainland markets but not for that in the Hong Kong market. Furthermore, consistent with signaling theory and the investors’ heuristic thinking in decision-making, investors may adopt the technological innovation capability of the country where the target firms locate, and the acquiring firm’s preannouncement in shaping their positive judgment of the acquiring firm’s near future performance. Originality/value The authors distinguished the responses of the investors from the mainland and Hong Kong stock markets and investigated how the knowledge of the national innovation capability of the target firm and acquisition preannouncement influence the investors’ interpretation of the cross-border M&As as a market signal.