Effects of Firm R&D Investment and Environment on Acquisition Likelihood*
Michael B. Heeley,
David R. King and
Jeffrey G. Covin
Journal of Management Studies, 2006, vol. 43, issue 7, 1513-1535
abstract R&D investments contribute to the development of firm technology resources, and the possession of such resources often increases a firm's attractiveness as a potential acquisition target. However, the value ascribed to a firm's technology resources by would‐be acquirers may be moderated by its industry's environmental characteristics. Using data from 2886 firms, we find that investments in R&D predict acquisition likelihood and that R&D investments are most strongly associated with acquisition of firms under conditions of high environmental munificence and dynamism. Theoretical and managerial implications are discussed.
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Persistent link: https://EconPapers.repec.org/RePEc:bla:jomstd:v:43:y:2006:i:7:p:1513-1535
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