Killer Acquisitions and Beyond: Policy Effects on Innovation Strategies

Igor Letina, Armin Schmutzler and Regina Seibel

No 15167, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper provides a theory of strategic innovation project choice by incumbents and start-ups which serves as a foundation for the analysis of acquisition policy. We show that prohibiting acquisitions has a weakly negative innovation effect. We provide conditions determining the size of the effect and, in particular, conditions under which it is zero. We further analyze the effects of less restrictive policies, including merger remedies and the tax treatment of acquisitions and initial public offerings. Such interventions tend to prevent acquisitions only if the entrant has sufficiently high stand-alone profits.

Keywords: Innovation; Killer acquisitions; Merger policy; Potential competition; Start-ups (search for similar items in EconPapers)
JEL-codes: G34 L41 O31 (search for similar items in EconPapers)
Date: 2020-08
New Economics Papers: this item is included in nep-com and nep-ino
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
https://cepr.org/publications/DP15167 (application/pdf)

Related works:
Journal Article: KILLER ACQUISITIONS AND BEYOND: POLICY EFFECTS ON INNOVATION STRATEGIES (2024)
Working Paper: Killer acquisitions and beyond: policy effects on innovation strategies (2023)
Working Paper: Killer Acquisitions and Beyond: Policy Effects on Innovation Strategies (2021)
Working Paper: Killer Aquisitions and Beyond: Policy Effects on Innovation Strategies (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:15167

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP15167

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().