The Impact of M&A on Technology Sourcing Strategies
AbstractThe 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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Bibliographic InfoPaper 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.
Date of creation: 11 Nov 2008
Date of revision:
Technology sourcing; Innovation; M&A; Heckman two-stage; Bi-Tobit.;
Find related papers by JEL classification:
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-11-18 (All new papers)
- NEP-COM-2008-11-18 (Industrial Competition)
- NEP-CSE-2008-11-18 (Economics of Strategic Management)
- NEP-INO-2008-11-18 (Innovation)
- NEP-IPR-2008-11-18 (Intellectual Property Rights)
- NEP-KNM-2008-11-18 (Knowledge Management & Knowledge Economy)
- NEP-MIC-2008-11-18 (Microeconomics)
- NEP-TID-2008-11-18 (Technology & Industrial Dynamics)
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