Bruno Cassiman (), Massimo Colombo, Paola Garrone and Reinhilde Veugelers
Additional contact information
Bruno Cassiman: IESE Business School, Postal: Research Division, Av Pearson 21, 08034 Barcelona, SPAIN
Massimo Colombo: Politecnico di Milano
Paola Garrone: Politecnico di Milano
Reinhilde Veugelers: Catholic University of Leuven
Abstract: While the impact of M&A on R&D and innovation examined at the aggregate level left inconclusive evidence, we find that at the level of the R&D process both the technological and the market relatedness between the target and the acquirer are helpful dimensions to identify effects. Using information on 31 in-depth cases of individual M&A deals we show that technological relatedness between M&A partners directly affects the inputs and organizational structure of the R&D process. M&A partners that operate in the same technological fields tend to reduce their R&D effort and rationalize the R&D process after the M&A compared to firms active in complementary technological fields that merge. These firms will furthermore face less technological competition in the technology market, but risk creating a more bureaucratic R&D process with a less motivated workforce. Market relatedness between partners, while having comparable aggregate effects on the R&D process, operates on different dimensions of the R&D process. Former rivals that engage in a M&A are significantly less likely to expand into new R&D fields or leverage their technological competences across the products and markets of the new entity. Non-rival firms that join forces, in contrast, significantly increase R&D output and productivity through these activities.
Keywords: M&A; R&D; scale and scope; market relatedness; technological relatedness
36 pages, April 30, 2003
Full text files
DI-0500-E.pdf
Questions (including download problems) about the papers in this series should be directed to Noelia Romero ()
Report other problems with accessing this service to Sune Karlsson ().
This page generated on 2024-02-05 15:47:28.