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Post-acquisition dynamics of technology start-ups: drawing the temporal boundaries of post-acquisition restructuring process

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  • Xiao, Jing

    () (CIRCLE, Lund University)

Abstract

The evolutionary perspective is important in order to understand post-acquisition restructuring as a dynamic process. In particular, this paper focuses on how the survival pattern of target start-ups as autonomous business units changes over time. This study observes a large sample of Swedish technology start-ups entering from 1997 to 2002 and follows them until 2009. Based on a discrete-time duration analysis, we find that acquisition affects the survival of target start-ups differently in the short-run and the long-run. Within 4 years after acquisition, acquisition is found to lower the probability of survival of start-ups as autonomous business units. However, from the 5th year after acquisition, the acquisition effects tend to become positive, although not statistically significant after possible endogeneity of acquisition is controlled for. It is inferred that acquired start-ups experience an extensive selection and experimentation internally by acquirers through post-acquisition restructuring within 4 years after acquisition. During the process, target start-ups’ operations are temporally disrupted

Suggested Citation

  • Xiao, Jing, 2018. "Post-acquisition dynamics of technology start-ups: drawing the temporal boundaries of post-acquisition restructuring process," Papers in Innovation Studies 2018/12, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
  • Handle: RePEc:hhs:lucirc:2018_012
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    More about this item

    Keywords

    Temporality; post-acquisition survival; post-acquisition restructuring; technology start-ups; Discrete-time duration models; Inverse-probability-of-treatment weights (IPTW); Sweden;

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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