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Hiring New Key Inventors to Improve Firms’ Post-M&A Inventive Output

Author

Listed:
  • Marta F. Arroyabe

    (Essex Business School, UK)

  • Katrin Hussinger

    (Department of Economics and Management, Université du Luxembourg)

  • John Hagedoorn

    (UNU-MERIT, United Nations University - Maastricht, NL)

Abstract

(To consult this DP, please send an e-mail to dem@uni.lu) Although merger and acquisitions (M&As) are acknowledged as an important means to access innovative assets and know-how, firms’ inventive output often declines in the post-M&A period. Financial, managerial and organizational constraints related to the M&A event contribute to inventive output declines and inventors’ departure. Prior literature treats the acquiring firm as a passive observer of invention declines. This study argues that acquiring firms can take measures by hiring new key inventors. We show that the hiring of new key inventors in the post-M&A period can counteract invention declines in two ways. First, these newly hired inventors are associated with an increase of corporate inventive output after the M&A. Second, they are also associated with an improved inventive output of inventors already working for the acquiring firm. These results suggest that an appropriate hiring policy can counteract declining inventive output of firms in the aftermath of M&As.

Suggested Citation

  • Marta F. Arroyabe & Katrin Hussinger & John Hagedoorn, 2020. "Hiring New Key Inventors to Improve Firms’ Post-M&A Inventive Output," DEM Discussion Paper Series 20-19, Department of Economics at the University of Luxembourg.
    • Handle: RePEc:luc:wpaper:20-19
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    Cited by:

    1. Luca Verginer & Massimo Riccaboni, 2022. "The Impact of Acquisitions in the Biotechnology Sector on R&D Productivity," Papers 2203.12968, arXiv.org, revised Jul 2025.
    2. Marta Arroyabe & Katrin Hussinger, 2024. "Acquisition experience and the winner’s curse in corporate acquisitions," Applied Economics, Taylor & Francis Journals, vol. 56(27), pages 3247-3261, June.
    3. María García‐Vega & Elena Huergo, 2021. "Organization of R&D outsourcing: Asymmetric cross‐effects between locations," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 30(3), pages 503-524, August.

    More about this item

    Keywords

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    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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