Technological similarity, post-acquisition R&D reorganization, and innovation performance in horizontal acquisitions

Massimo G. Colombo and Larissa Rabbiosi

Research Policy, 2014, vol. 43, issue 6, 1039-1054

Abstract: This paper aims to disentangle the mechanisms through which technological similarity between acquiring and acquired firms influences innovation in horizontal acquisitions. We develop a theoretical model that links technological similarity to: (i) two key aspects of post-acquisition reorganization of acquired R&D operations – the rationalization of the R&D operations and the replacement of the R&D top manager, and (ii) two intermediate effects that are closely associated with the post-acquisition innovation performance of the combined firm – improvements in R&D productivity and disruptions in R&D personnel. We rely on PLS techniques to test our theoretical model using detailed information on 31 horizontal acquisitions in high- and medium-tech industries. Our results indicate that in horizontal acquisitions, technological similarity negatively affects post-acquisition innovation performance and that this negative effect is not mediated by the reorganization of the acquired R&D operations. However, replacing the acquired firm's R&D top manager leads to R&D productivity improvements that positively affect innovation performance.

Keywords: Technological similarity; Horizontal acquisitions; Post-acquisition innovation performance; Post-acquisition R&D reorganization; R&D productivity; Disruptions of R&D personnel (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (25)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:respol:v:43:y:2014:i:6:p:1039-1054

DOI: 10.1016/j.respol.2014.01.013

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