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R&D and M&A : Are cross-border M&A different ? An investigation on OECD countries

Listed author(s):
  • Olivier Bertrand

    ()

    (TEAM)

  • Pluvia Zuniga

    ()

    (TEAM)

This paper investigates the incidence of national and cross-border M&A on industrial R&D investment in OECD countries over the period 1990-1999. We use generalized method of moments (GMM) estimation techniques for dynamic panel data and control for market-related and technological determinants of R&D production. Our findings show that the last M&A wave contributed to expand domestic R&D activities, especially in high-technology intensive industries. However, further evidence suggests that cross-border M&A (particularly outward M&A), and not domestic ones, have stimulated more significantly R&D spending. This result gives evidence that anti-competition effects are more likely to affect negatively R&D activities with a domestic M&A. Reversely, efficiency gains might be higher in a cross-border operation, encouraging merging firms to raise their R&D investments.

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Paper provided by Université Panthéon-Sorbonne (Paris 1) in its series Cahiers de la Maison des Sciences Economiques with number bla04072.

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Length: 33 pages
Date of creation: Jul 2004
Handle: RePEc:mse:wpsorb:bla04072
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