R&D intensity and acquisition and divestiture of corporate assets: Evidence from Japan

Tatsuo Ushijima

Journal of Economics and Business, 2009, vol. 61, issue 5, pages 415-433

Abstract: This article provides evidence from Japanese acquisitions and divestitures after the late 1990s on the effect of corporate R&D to stimulate inter-firm asset trade. Consistent with the notion that R&D increases a firm's opportunities for and ability to profit from synergy with external assets, regressions performed on a sample of publicly traded manufacturers reveal that R&D intensity and the breadth of patented technologies positively and significantly correlate with a firm's probabilities to acquire and sell off assets. The link of R&D and divestiture is qualitatively homogeneous across industries and time but the positive and significant R&D-acquisition link concentrates in industries where the interdependence of firms' innovative activities is relatively high and time when firms likely had large pent-up demand for asset trade.

Keywords: R&; D; Patent; Acquisition; Divestiture; Japanese; firm (search for similar items in EconPapers)
Date: 2009

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Persistent link: http://EconPapers.repec.org/RePEc:eee:jebusi:v:61:y::i:5:p:415-433

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