Mergers and acquistions: their effect on the innovative performance of companies in high-tech industries

J. Hagedoorn, M.M.A.H. Cloodt, H.L. van Kranenburg

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

This study examines the post-m&a innovative performance of acquiring firms in four major high-tech sectors. Non-technological m&as appear to have a negative impact on the acquiring firm's post-m&a innovative performance. With respect to technological m&as, a large relative size of the acquired knowledge base reduces the innovative performance of the acquiring firm. The absolute size of the acquired knowledge base only has a positive effect during the first couple of years after which the effect turns around and we see a negative effect on the innovative performance of the acquiring firm. The relatedness between the acquired and acquiring firms’ knowledge bases has a curvilinear impact on the acquiring firm's innovative performance. This indicates that companies should target m&a ‘partners’ that are neither too unrelated nor too similar in terms of their knowledge base.
Original languageEnglish
Pages (from-to)642-654
JournalResearch Policy
Volume35
DOIs
Publication statusPublished - 1 Jan 2006

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