Hiring new key inventors to improve firms’ post-M&A inventive output

M.F. Arroyabe*, K. Hussinger, J. Hagedoorn

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

2 Citations (Web of Science)
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Abstract

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 the declining inventive output of firms in the aftermath of M&As.
Original languageEnglish
Pages (from-to)494-509
Number of pages16
JournalR & D Management
Volume50
Issue number4
DOIs
Publication statusPublished - Sep 2020

JEL classifications

  • o31 - Innovation and Invention: Processes and Incentives
  • g34 - "Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance"

Keywords

  • CORPORATE ACQUISITIONS
  • ORGANIZATIONAL-CHANGE
  • EMPLOYEE MOBILITY
  • KNOWLEDGE
  • MERGERS
  • INNOVATION
  • PRODUCTIVITY
  • TECHNOLOGY
  • NETWORKS
  • PATENTS

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