Mergers & acquisitions and innovation performance in the telecommunications equipment industry
The worldwide telecommunications equipment industry has experienced an enormous number of mergers and acquisitions (M&A). This article examines the innovation determinants of M&A activity and the consequences of M&A on technological potential and innovation performance. We extend the resource-based theory in elucidating external technology sourcing and provide empirical evidence on the keen reliance of the equipment firms on M&A as a technology sourcing strategy for the period 1988--2004. Employing the matching propensity score approach, this study provides evidence that mergers realize a significant growth in the innovation performance of firms. The postmerger innovation performance, in turn, is driven by both the prior success of in-house R&D commitment and the deterioration of internal technological capabilities at acquiring firms. Copyright 2012 The Author 2011. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved., Oxford University Press.
Volume (Year): 21 (2012)
Issue (Month): 2 (April)
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