This paper investigates the incidence of national and cross-border M&A on industrial R&D investment in OECD countries over the period 1990-1999. We use generalized method of moments (GMM) estimation techniques for dynamic panel data and control for market-related and technological determinants of R&D production. Our findings show that the last M&A wave contributed to expand domestic R&D activities, especially in high-technology intensive industries. However, further evidence suggests that cross-border M&A (particularly outward M&A), and not domestic ones, have stimulated more significantly R&D spending. This result gives evidence that anti-competition effects are more likely to affect negatively R&D activities with a domestic M&A. Reversely, efficiency gains might be higher in a cross-border operation, encouraging merging firms to raise their R&D investments.
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Find related papers by JEL classification: O30 - Economic Development, Technological Change, and Growth - - Technological Change - - - General L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
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