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The Impact of M&A on Technology Sourcing Strategies

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Author Info
Elena Cefis
Abstract

The paper investigates the effects of Mergers and Acquisitions (M&A) on corporate research and development (R&D) strategies using Community Innovation Survey (CIS) data on the Dutch manufacturing sector. The focus of the research is whether M&A affect corporate innovation strategies, favouring in-house R&D and innovation expenses versus external technological sourcing. The results show that M&A activities have a positive and significant impact on innovation investments by firms, and particularly on R&D intensity and total expenditure on innovation. M&A affect corporate innovation strategies, favouring in-house R&D versus external technological sourcing. Firm post-merger behaviour favours the consolidation of the knowledge, competences and capabilities that have been acquired by merging with or by buying another firm, confirming that the reasons for a merger or acquisition are most often related to firms' innovative performance. Following involvement in a M&A, firms tend primarily to focus on fully integration of their resource bases in order to enable them to produce and sell innovative products that are new to the market.

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Paper provided by Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy in its series LEM Papers Series with number 2008/25.

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Date of creation: 11 Nov 2008
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Handle: RePEc:ssa:lemwps:2008/25

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Related research
Keywords: Technology sourcing; Innovation; M&A; Heckman two-stage; Bi-Tobit.;

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Find related papers by JEL classification:
D21 - Microeconomics - - Production and Organizations - - - Firm Behavior
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives
O32 - Economic Development, Technological Change, and Growth - - Technological Change - - - Management of Technological Innovation and R&D
L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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