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Mergers & acquisitions and innovation performance in the telecommunications equipment industry

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  • Tseveen Gantumur
  • Andreas Stephan

Abstract

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.

Suggested Citation

  • Tseveen Gantumur & Andreas Stephan, 2012. "Mergers & acquisitions and innovation performance in the telecommunications equipment industry," Industrial and Corporate Change, Oxford University Press, vol. 21(2), pages 277-314, April.
  • Handle: RePEc:oup:indcch:v:21:y:2012:i:2:p:277-314
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    File URL: http://hdl.handle.net/10.1093/icc/dtr052
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    Cited by:

    1. Torsten Gerpott, 2009. "Forschung & Entwicklung und technologieorientierte Unternehmensakquisitionen," Metrika: International Journal for Theoretical and Applied Statistics, Springer, pages 9-41.
    2. Volodymyr Perederiy, 2007. "Kombinierte Liquiditäts- und Solvenzkennzahlen und ein darauf basierendes Insolvenzprognosemodell für deutsche GmbHs," SFB 649 Discussion Papers SFB649DP2007-060, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    3. Andreas Stephan, 2014. "Are public research spin-offs more innovative?," Small Business Economics, Springer, pages 353-368.
    4. Andreas Stephan, 2014. "Are public research spin-offs more innovative?," Small Business Economics, Springer, pages 353-368.

    More about this item

    JEL classification:

    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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