 Acquirers’ Reception of Signals in M&A Markets: Effects of Acquirer Experiences on Target SelectionCheng‐Wei Wu and Jeffrey J. Reuer Journal of Management Studies, 2021, vol. 58, issue 5, 1237-1266 Abstract: A key challenge facing acquirers is how to judge the technological and other resources of high‐tech ventures. While it is well known that acquirers can benefit from signals about targets to reduce acquirers’ uncertainty in the selection of acquisition targets, this leaves open the question of the degree to which certain acquirers would rely on a target’s signals. We argue that different levels and types of experience can shape an acquirer’s attention to high‐tech ventures’ signals. On the one hand, general acquisition experience can lead an acquirer to pay more attention to and act on signals. On the other hand, target‐specific experience developed from prior collaborations can reduce the value of signals by directly mitigating an acquirer’s risk of adverse selection. Based on a sample of over a thousand technology ventures in the US biotechnology industry, our empirical evidence demonstrates that the combination of acquirers’ experiences and targets’ signals explains who buys whom in a high‐tech industry. Date: 2021 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:jomstd:v:58:y:2021:i:5:p:1237-1266 Ordering information: This journal article can be ordered from Access Statistics for this article Journal of Management Studies is currently edited by Timothy Clark, Steven W. Floyd and Mike Wright More articles in Journal of Management Studies from Wiley Blackwell |
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