The Impact of M&A on Technology Sourcing Strategies
The paper investigates the effects of Mergers and Acquisitions (M&A) on corporate research and development (R&D) strategies using Community Innovation Survey (CIS) 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 a M&A, firms tend primarily to focus on fully 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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