Do high technology acquirers become more innovative? |
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| Authors: | Panos Desyllas Alan Hughes |
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| Institution: | a Manchester Business School, University of Manchester, Booth Street West, Manchester M15 6PB, United Kingdom
b Centre for Business Research, Judge Business School, University of Cambridge, Trumpington Street, Cambridge CB2 1AG, United Kingdom |
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| Abstract: | Drawing on organizational, managerial and financial theories, we explore whether acquirers become more innovative and the factors that can enhance their absorptive and financial capacity to benefit from acquisition. Over a 3-year post-acquisition window, our sample of 2624 high technology US acquisitions records early reverses followed by positive R&D-intensity changes and insignificant R&D productivity changes. Controlling for acquisition endogeneity and deal-specific effects, significant acquirer characteristic effects emerge. In related acquisitions, a large knowledge base tends to increase R&D productivity, consistent with an enhanced capacity to select and absorb targets. In unrelated acquisitions, however, this relationship becomes increasingly negative as knowledge base concentration increases, consistent with arguments for an impaired peripheral vision and core rigidities. High leverage levels raise R&D productivity gains, consistent with enhanced monitoring induced efficiency. However, high leverage growth reduces R&D-intensity, consistent with increased financial constraints and short-termism. |
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| Keywords: | Acquisitions Innovation Propensity score |
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