 Technology centrality, bilateral knowledge spillovers and mergers and acquisitionsJingong Huang and Taojun Xie Journal of Corporate Finance, 2023, vol. 79, issue C Abstract: We construct a search and matching model, which features heterogeneous firms with different management skills and industry-specific knowledge capital, to study individual firms’ behavior in the M&A market. Two firms form a merger if the bilateral knowledge spillovers between them result in a productivity gain, generating a merger surplus larger than the transaction cost. Three key predictions are produced from the model: (i) acquirers with higher technology centrality and management skill exert higher search intensities; (ii) targets with higher technology centrality and lower management skill exert higher search intensities; and (iii) acquirer–target firm pairs with larger bilateral knowledge spillovers generate larger surplus and are more likely to consummate a merger deal. We find strong empirical support for these predictions from merger deals in the U.S. between 1984 and 2020. Keywords: Knowledge spillovers; M&A; Technology centrality (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:79:y:2023:i:c:s0929119923000159 DOI: 10.1016/j.jcorpfin.2023.102366 Access Statistics for this article Journal of Corporate Finance is currently edited by A. Poulsen and J. Netter More articles in Journal of Corporate Finance from Elsevier |
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