Start-up Acquisitions, Venture Capital and Innovation: A Comparative Study of Google, Apple, Facebook, Amazon and Microsoft

Klaus Gugler (), Florian Szücs and Ulrich Wohak ()
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Klaus Gugler: Department of Economics, Vienna University of Economics and Business
Ulrich Wohak: Department of Economics, Vienna University of Economics and Business

Department of Economics Working Papers from Vienna University of Economics and Business, Department of Economics

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 (search for similar items in EconPapers)
JEL-codes: D22 G34 K21 L41 (search for similar items in EconPapers)
Date: 2023-07
New Economics Papers: this item is included in nep-cfn, nep-com, nep-ent, nep-ino, nep-law, nep-pay, nep-reg and nep-sbm
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Working Paper: Start-up Acquisitions, Venture Capital and Innovation: A Comparative Study of Google, Apple, Facebook, Amazon and Microsoft (2023)
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