Look at U: Technological scope of the acquirer, technological complementarity with the target, and post-acquisition R&D output

M. Shafique*, J. Hagedoorn

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

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Different streams of literature in economics and strategy suggest that several characteristics of a firm's technological base such as diversity, breadth, depth, and R&D portfolio affect its R&D output. Separately, strategy literature on technological mergers and acquisitions (M&As) suggests that the relationship between technological knowledge bases of the acquirer and the target, such as their technological similarities and complementarities, also affects the post-acquisition R&D output. This paper integrates the knowledge from these streams to further our understanding of technological M&As by examining how the pre-acquisition technological scope of an acquirer, encompassing the diversity and breadth of its technological knowledge base, affects its post-acquisition R&D output. Our analysis of a panel of technological acquisitions suggests that the acquirer's technological scope has a U-shaped relationship with post-acquisition R&D output, measured in terms of patent filings. Moreover, technological complementarity between the acquirer's and target's knowledge bases positively moderates this relationship. Results show that acquirers have higher post-acquisition R&D output when their pre-acquisition technological scope is either narrow or broad rather than moderate.
Original languageEnglish
Article number102533
Number of pages13
Publication statusPublished - Jul 2022

JEL classifications

  • g34 - "Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance"

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