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The impact of M&A on technology sourcing strategies

  • Elena Cefis

The paper investigates the effects of mergers and acquisitions (M&A) on corporate research and development (R&D) strategies using Community Innovation Survey data on the Dutch manufacturing sector. The focus of the research is whether M&A affect corporate innovation strategies, favouring in-house R&D and innovation expenses versus external technological sourcing. The results show that M&A activities have a positive and significant impact on innovation investments by firms, and particularly on R&D intensity and total expenditure on innovation. M&A affect corporate innovation strategies, favouring in-house R&D versus external technological sourcing. Firm post-merger behaviour favours the consolidation of the knowledge, competences and capabilities that have been acquired by merging with or by buying another firm, confirming that the reasons for a merger or acquisition are most often related to firms' innovative performance. Following involvement in M&A, firms tend primarily to focus on full integration of their resource bases in order to enable them to produce and sell innovative products that are new to the market.

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Article provided by Taylor & Francis Journals in its journal Economics of Innovation and New Technology.

Volume (Year): 19 (2010)
Issue (Month): 1 ()
Pages: 27-51

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Handle: RePEc:taf:ecinnt:v:19:y:2010:i:1:p:27-51
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  18. Cassiman, Bruno & Veugelers, Reinhilde, 2007. "Are external technology sourcing strategies substitutes or complements? The case of embodied versus disembodied technology acquisition," IESE Research Papers D/672, IESE Business School.
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  25. E. Cefis & A. Sabidussi & E.J.J Schenk, 2007. "Do mergers of potentially dominant firms foster innovation? An empirical analysis for the manufacturing sector," Working Papers 07-20, Utrecht School of Economics.
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