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Acquisitions, Divestitures and Innovation Performance in the Netherlands

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  • Van Beers, Cees
  • Dekker, Ronald

Abstract

This aim of this paper is twofold. First it examines the determinants of acquisitions and divestitures of Dutch firms in the period 1996-2004. Second, it investigates the impact of acquisitions and divestitures on the firm’s innovative output performance. An econometric model is specified and estimated with Community Innovation Survey data for the Netherlands in the period 1996-2004. The main findings of this study are as follows. First, innovating firms are significantly more involved in acquisition activities than non-innovating firms, which suggests that acquisitions are a strategy to gain access to new technologies or knowledge. Second, lack of knowledge as a barrier to innovate increases the chance of acquiring assets of other firms although not significantly. Lack of finance as a barrier to innovate increases significantly the chance of divesting assets. Third, acquisitions motivated by knowledge barriers in the innovation process affect the probability of positive innovative sales positively while acquisitions motivated by other reasons than innovation barriers affect this probability negatively. No effect of knowledge barriers induced acquisitions on the level of the innovative sales could be found.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 13464.

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Date of creation: 02 Feb 2009
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Handle: RePEc:pra:mprapa:13464

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Keywords: Innovation; performance; mergers; acquisitions; divestitures; strategy;

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References

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  1. Cloodt, Myriam & Hagedoorn, John & Van Kranenburg, Hans, 2006. "Mergers and acquisitions: Their effect on the innovative performance of companies in high-tech industries," Research Policy, Elsevier, vol. 35(5), pages 642-654, June.
  2. Cassiman, Bruno & Colombo, Massimo G. & Garrone, Paola & Veugelers, Reinhilde, 2005. "The impact of M&A on the R&D process: An empirical analysis of the role of technological- and market-relatedness," Research Policy, Elsevier, vol. 34(2), pages 195-220, March.
  3. Klaus Gugler & Dennis C. Mueller & B. Burcin Yurtoglu & Christine Zulehner, 2001. "The Effects of Mergers: An International Comparison," CIG Working Papers FS IV 01-21, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
  4. Randall Morck & Andrei Shleifer & Robert W. Vishny, 1987. "Characteristics of Hostile and Friendly Takeover Targets," NBER Working Papers 2295, National Bureau of Economic Research, Inc.
  5. Cees van Beers & Bert Sadowski, 2003. "On the Relationship Between Acquisitions, Divestitures and Innovations: An Explorative Study," Journal of Industry, Competition and Trade, Springer, vol. 3(1), pages 131-143, March.
  6. Jensen, Michael C, 1988. "Takeovers: Their Causes and Consequences," Journal of Economic Perspectives, American Economic Association, vol. 2(1), pages 21-48, Winter.
  7. Maksimovic, Vojislav & Phillips, Gordon & Prabhala, N.R., 2011. "Post-merger restructuring and the boundaries of the firm," Journal of Financial Economics, Elsevier, vol. 102(2), pages 317-343.
  8. Sorensen, Donald E., 2000. "Characteristics of merging firms," Journal of Economics and Business, Elsevier, vol. 52(5), pages 423-433.
  9. Michael L. Katz & Howard A. Shelanski, 2005. "Merger Policy and Innovation: Must Enforcement Change to Account for Technological Change?," NBER Chapters, in: Innovation Policy and the Economy, Volume 5, pages 109-165 National Bureau of Economic Research, Inc.
  10. Veugelers, Reinhilde & Cassiman, Bruno, 1999. "Make and buy in innovation strategies: evidence from Belgian manufacturing firms," Research Policy, Elsevier, vol. 28(1), pages 63-80, January.
  11. Mitchell, Mark L. & Mulherin, J. Harold, 1996. "The impact of industry shocks on takeover and restructuring activity," Journal of Financial Economics, Elsevier, vol. 41(2), pages 193-229, June.
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