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The effects of acquisition on the growth of new technology-based firms: Do different types of acquirers matter?

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  • Jing Xiao

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Abstract

The growth of new technology-based firms (NTBFs) is usually restricted by their limited ownership and management structures. This paper explores whether acquisition, particularly that by multinational enterprises (MNEs), promotes the growth of NTBFs. Based on Swedish micro-level longitudinal data, this study further distinguishes between Swedish MNEs and foreign MNEs as acquirers and disentangles their different acquisition effects on the growth of NTBFs. Based on a large sample of Swedish NTBFs entering from 1997 to 2002 and being followed until 2009, this paper uses fixed-effects model combined with inverse-probability-of-treatment weights to account for endogeneity of acquisition arising from both time-invariant and time-varying heterogeneity across firms. The findings show that acquisition by Swedish MNEs significantly improves the growth of NTBFs, but only when it comes to the growth in employees. In contrast, acquisition by both foreign MNEs and Swedish domestic enterprises is not found to have any significant effects on the growth in either employees or sales of NTBFs. Copyright The Author(s) 2015

Suggested Citation

  • Jing Xiao, 2015. "The effects of acquisition on the growth of new technology-based firms: Do different types of acquirers matter?," Small Business Economics, Springer, vol. 45(3), pages 487-504, October.
  • Handle: RePEc:kap:sbusec:v:45:y:2015:i:3:p:487-504
    DOI: 10.1007/s11187-015-9656-y
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    Cited by:

    1. repec:eee:tefoso:v:127:y:2018:i:c:p:141-153 is not listed on IDEAS
    2. Erik E. Lehmann & Manuel T. Schwerdtfeger, 2016. "Evaluation of IPO-firm takeovers: an event study," Small Business Economics, Springer, vol. 47(4), pages 921-938, December.
    3. Andrea Signori & Silvio Vismara, 2017. "Stock-financed M&As of newly listed firms," Small Business Economics, Springer, vol. 48(1), pages 115-134, January.

    More about this item

    Keywords

    Acquisition; New technology-based firms (NTBFs); Firm growth; Multinational enterprises (MNEs); Inverse-probability-of-treatment weights (IPTW); Selection and treatment effects; F23; G34; L21; L26;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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