Abstract: Cross-border M&A of Chinese enterprises is mostly in a “cultural adversity” situation.Based on the analysis of cultural barriers faced by Chinese enterprises after transnational mergers and acquisitions, this paper uses the system dynamics method to construct the SD model of cultural integration process, explores four scenarios of corporate cultural integration according to the cost and benefit of cultural integration,and uses Vensim Dss simulation software to analyze the influence of self-realization, work value, communication, recognition and trust, salary incentive and equity incentive on cultural integration.The results show that spiritual incentive, emotional incentive and material incentive can effectively promote the cultural integration of both sides of M&A enterprises, and there are complementary effects among them. Therefore, the research results not only help to improve and develop the theoretical system of merger and acquisition integration, but also provide a reference for the design and implementation of cross-border merger and acquisition cultural integration of Chinese enterprises.

Key words: cross-border M&A, cultural adversity, cultural integration, systematic dynamics, incentive mechanism