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Is M&A Information Useful for Exploring Promising Industries and Technologies?

Author

Listed:
  • Jinho Choi

    (School of Business, Sejong University, Seoul 05006, Korea)

  • Sunghun Chung

    (Leavey School of Business, Santa Clara University, Santa Clara, CA 95053, USA)

  • Yong Sik Chang

    (Department of IT Management, Hanshin University, Osan 18101, Gyeonggi-do, Korea)

Abstract

Companies today that seek to diversify their business are looking for opportunities in new markets by considering their core competencies. However, companies are struggling to diversify and grow their current businesses due to a lack of information concerning diversification and a low level of capability for future commercialization. In this study, we suggest a new methodology that identifies promising industry and technology areas by examining mergers and acquisitions (M&As) transaction data. Specifically, by analyzing the extent to which firms have engaged in M&A activities, the prediction of promising industries is derived from the relationships among specific industries, as well as the M&A transactions among technology areas within a focal industry. We first theoretically test whether all M&A transactions are related to promising areas. Second, we analyze the trends of global M&As by a time-series analysis of M&A transactions by sectors over the last 15 years. Lastly, we conduct an association analysis to identify the degree of M&A connections between industry and technology areas, respectively. We hope that our results provide insights for R&D policymakers and investors who need to decide on promising industries to cultivate or invest in, and researchers who want to identify overall M&A trends and promising industries and technology areas.

Suggested Citation

  • Jinho Choi & Sunghun Chung & Yong Sik Chang, 2019. "Is M&A Information Useful for Exploring Promising Industries and Technologies?," Sustainability, MDPI, vol. 12(1), pages 1-19, December.
    • Handle: RePEc:gam:jsusta:v:12:y:2019:i:1:p:139-:d:301177
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    References listed on IDEAS

    as
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