This paper integrates institutional theory and resource-based view, and takes 163 Chinese MNEs listed in Shanghai and Shenzhen A-shares in 2016 as a sample of M&A transactions to explore how institutional distance influences cross-border M&A performance of Chinese firms. The results show that, both formal and informal institutional distance have a negative impact on firms’overseas M&A performance, i.e., the greater the formal or informal institutional distance, the worse the overseas M&A performance; Chinese multinational firms’ability to utilize resources and acquire resources, i.e., rich overseas M&A experience or strong political connections, can enhance the competitive advantage of multinational firms and thus weaken the negative impact of institutional distance on overseas M&A performance. The findings deepen the research framework on overseas M&A performance in emerging economies and have important practical implications for how Chinese MNEs can leverage their heterogeneous resource advantages to improve their overseas M&A performance.