Innovation Activities and Integration through Vertical Acquisitions

Laurent Frésard, Gerard Hoberg and Gordon Phillips
Additional contact information
Laurent Frésard: Universita della Svizzera italiana (USI Lugano); Swiss Finance Institute
Gerard Hoberg: University of Southern California - Marshall School of Business - Finance and Business Economics Department

No 19-36, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: We examine the determinants of vertical acquisitions using product text linked to product vocabulary from the input-output tables. We find that the stage of innovation is important in understanding vertical integration. R\&D-intensive firms are less likely to become targets in vertical acquisitions. In contrast, firms with patented innovation are more likely to sell to vertically-related buyers. Firms' R&D intensity is a more important deterrent to their vertical acquisitions when the provision of innovation incentives by potential acquirers is more difficult. The role of patents in fostering vertical acquisitions is more prevalent when potential buyers face a higher risk of hold-up.

Keywords: Mergers and Acquisitions; Vertical Mergers; Vertical Integration (search for similar items in EconPapers)
JEL-codes: G34 (search for similar items in EconPapers)
Pages: 79 pages
Date: 2019-07
New Economics Papers: this item is included in nep-com, nep-ino and nep-tid
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Citations: View citations in EconPapers (7)

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Related works:
Journal Article: Innovation Activities and Integration through Vertical Acquisitions (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp1936

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