Oliver (1997) put forward the concept of “institutional capital” and established a theoretical framework for the co-existence of institutional capital and resource capital as sources of competitive advantage. However, there is little empirical evidence to verify the relationship between them . From the perspective of the acquiring fi rms in cross-border Merger and Acquisition (CBMA) , this study examines the impact of homecountry institutional capital owned by these fi rms on their CBMA performance, and also concretizes resource capital as firm-specific advantage (FSA) to explore the moderating effect of FSA. Specifically, This study took the M&A events in the upswing period of the latest round of Chinese fi rms' CBMA cycle as the research sample and carried out an empirical research based on questionnaire survey. Our results suggested that the institutional capital of Chinese firms is positively associated to the CBMA performance, while the positive effect of institutional capital on CBMA performance is diminished for fi rms with stronger FSA. In addition, institutional capital and resource capital do not show a mutually reinforcing positive effect, but rather a degree of substitution. These findings provide a new insight into the understanding of “how institutions matter”, and deepen the understanding of the difference between institutional capital and resource capital in the role of competitive advantage. Meanwhile, This study provides valuable practical enlightenment for Chinese fi rms to understand the effect of institutional capital based on state or government power in CBMA performance, that is, the impact of institutional capital on the overall M&A performance is beneficial, but with conditional.