European Business Schools Librarian's Group
Department of Economics Working Papers,
Vienna University of Economics and Business, Department of Economics
No 340: Start-up Acquisitions, Venture Capital and Innovation: A Comparative Study of Google, Apple, Facebook, Amazon and Microsoft
Klaus Gugler (), Florian Szücs () and Ulrich Wohak ()
Additional contact information
Klaus Gugler: Department of Economics, Vienna University of Economics and Business
Florian Szücs: Department of Economics, Vienna University of Economics and Business
Ulrich Wohak: Department of Economics, Vienna University of Economics and Business
Abstract: We evaluate the impact of big-tech acquisitions on the incentives for investment and innovation. Using data on several hundred acquisitions by Google, Apple, Facebook, Amazon and Microsoft (GAFAM), we study the evolution of venture capital investment and patenting relative to control groups. The results show a clear negative impact on investment, while the effect on innovation depends on the acquirer and period. Both outcomes improve over time, as GAFAM firms become more similar in terms of their product and tech-portfolios, increasing competition. Yet, around 10% of acquisitions impact both metrics negatively.
Keywords: M&A, big-tech, innovation, investment
JEL-codes: D22; G34; K21; L41 July 2023
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