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Complementarities and spillovers in mergers: an empirical investigation using patent data

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Author Info

  • Alan Marco
  • Gordon Rausser

Abstract

We investigate the merger behavior of firms in the plant biotechnology sector using firm-level patent data for public and private firms in the 1980s and 1990s. Conditional logit estimation is used to estimate the probability that the firms will match in mergers and spinoffs. We calculate several patent portfolio-based measures of complementarity and spillovers between firms, and find that both are important to defining a good match of acquirer and target. However, complementarities provide the more robust explanation. The mergers and spinoffs observed in plant biotechnology may have been designed to overcome the anti-commons problem of mutually blocking technology, an extreme form of complementarity. Our results highlight the need to integrate patent and competition policy.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Economics of Innovation and New Technology.

Volume (Year): 20 (2011)
Issue (Month): 3 ()
Pages: 207-231

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Handle: RePEc:taf:ecinnt:v:20:y:2011:i:3:p:207-231

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Related research

Keywords: mergers; acquisitions; patents; plant biotechnology; agricultural biotechnology; complementarities; spillovers;

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References

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Cited by:
  1. Ornaghi, Carmine, 2006. "Mergers and innovation: the case of the pharmaceutical industry," Discussion Paper Series In Economics And Econometrics 0605, Economics Division, School of Social Sciences, University of Southampton.
  2. DUGUET Emmanuel & MacGARVIE Megan, 2004. "How Well Do Patent Citations Measure Flows of Technology? Evidence from French Innovation Surveys," Development and Comp Systems 0411018, EconWPA.
  3. Ornaghi, Carmine, 2009. "Mergers and innovation in big pharma," International Journal of Industrial Organization, Elsevier, vol. 27(1), pages 70-79, January.

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