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Technological similarity, post-acquisition R&D reorganization, and innovation performance in horizontal acquisitions

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  • Colombo, Massimo G.
  • Rabbiosi, Larissa

Abstract

This paper aims to disentangle the mechanisms through which technological similarity between acquiring and acquired firms influences innovation in horizontal acquisitions. We develop a theoretical model that links technological similarity to: (i) two key aspects of post-acquisition reorganization of acquired R&D operations – the rationalization of the R&D operations and the replacement of the R&D top manager, and (ii) two intermediate effects that are closely associated with the post-acquisition innovation performance of the combined firm – improvements in R&D productivity and disruptions in R&D personnel. We rely on PLS techniques to test our theoretical model using detailed information on 31 horizontal acquisitions in high- and medium-tech industries. Our results indicate that in horizontal acquisitions, technological similarity negatively affects post-acquisition innovation performance and that this negative effect is not mediated by the reorganization of the acquired R&D operations. However, replacing the acquired firm's R&D top manager leads to R&D productivity improvements that positively affect innovation performance.

Suggested Citation

  • Colombo, Massimo G. & Rabbiosi, Larissa, 2014. "Technological similarity, post-acquisition R&D reorganization, and innovation performance in horizontal acquisitions," Research Policy, Elsevier, vol. 43(6), pages 1039-1054.
  • Handle: RePEc:eee:respol:v:43:y:2014:i:6:p:1039-1054
    DOI: 10.1016/j.respol.2014.01.013
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    Cited by:

    1. repec:eee:tefoso:v:120:y:2017:i:c:p:334-346 is not listed on IDEAS
    2. McCarthy, Killian J. & Aalbers, Hendrik Leendert, 2016. "Technological acquisitions: The impact of geography on post-acquisition innovative performance," Research Policy, Elsevier, vol. 45(9), pages 1818-1832.
    3. repec:eee:ecmode:v:68:y:2018:i:c:p:229-238 is not listed on IDEAS
    4. repec:eee:tefoso:v:127:y:2018:i:c:p:258-270 is not listed on IDEAS
    5. Feiqiong Chen & Qiaoshuang Meng & Fei Li, 0. "How resource information backgrounds trigger post-merger integration and technology innovation? A dynamic analysis of resource similarity and complementarity," Computational and Mathematical Organization Theory, Springer, vol. 0, pages 1-32.

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