Effects of Acquisitions on Product and Process Innovation and R&D Performance
AbstractUsing a game theoretical model on firms' simultaneous investments in product and process innovation, we deduct and empirically test hypotheses on the optimal R&D portfolio, investment, performance, and dynamic efficiency of R&D for acquisitions and in independently competing firms. We use Community Innovation Survey data on Italian manufacturing firms. Theoretical and empirical results show that firms involved in acquisitions invest in different R&D portfolios and invest at least as much in aggregate R&D as independent firms. The empirical results do not support our hypothesis on dynamic efficiency since acquisitions lead to inferior R&D performance.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5275.
Date of creation: Oct 2005
Date of revision:
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Other versions of this item:
- Elena Cefis & Stephanie Rosenkranz & Utz Weitzel, 2005. "Effects of Acquisitions on Product and Process Innovation and R&D Performance," Working Papers 05-28, Utrecht School of Economics.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-12-09 (All new papers)
- NEP-COM-2005-12-09 (Industrial Competition)
- NEP-IND-2005-12-09 (Industrial Organization)
- NEP-INO-2005-12-09 (Innovation)
- NEP-TID-2005-12-09 (Technology & Industrial Dynamics)
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