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

  • Colombo, Massimo G.
  • Rabbiosi, Larissa
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    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.

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    Article provided by Elsevier in its journal Research Policy.

    Volume (Year): 43 (2014)
    Issue (Month): 6 ()
    Pages: 1039-1054

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    Handle: RePEc:eee:respol:v:43:y:2014:i:6:p:1039-1054
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