M&A and R&D: Asymmetric Effects on Acquirers and Targets?
AbstractWe evaluate the impact of M&A activity on the growth of R&D spending and R&D intensity of 265 acquiring firms and 133 merger targets between 1990 and 2009. We use different matching techniques to construct separate control groups for acquirers and targets and use appropriate difference-in-difference estimation methods to single out the causal effect of mergers on R&D growth and intensity. We find that target firms substantially decrease their R&D efforts after a merger, while the R&D intensity of acquirers drops due to a sharp increase in sales.
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Bibliographic InfoPaper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 1331.
Length: 23 p.
Date of creation: 2013
Date of revision:
Mergers; R&D growth; R&D intensity; propensity-score matching; difference in difference estimation;
Find related papers by JEL classification:
- D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-11-02 (All new papers)
- NEP-CFN-2013-11-02 (Corporate Finance)
- NEP-COM-2013-11-02 (Industrial Competition)
- NEP-CSE-2013-11-02 (Economics of Strategic Management)
- NEP-IND-2013-11-02 (Industrial Organization)
- NEP-INO-2013-11-02 (Innovation)
- NEP-TID-2013-11-02 (Technology & Industrial Dynamics)
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