Crossing the innovation threshold through mergers and acquisitions

Elena Cefis and Orietta Marsili

Research Policy, 2015, vol. 44, issue 3, 698-710

Abstract: Firms are resorting more and more to mergers and acquisitions (M&A) to bridge the gap between where they are and where they would like to be in relation to innovation and performance. This paper investigates whether involvement in M&A triggers distinct patterns of innovative behaviour across firms, and whether this effect is conditional on firm size. The analysis combines data from four waves of the Community Innovation Survey (CIS) and the Business Register of Dutch manufacturing firms. We observe that M&As influence the probability that firms will begin innovation activities or persist with them, and these effects vary at different points in the firm size distribution. In particular, by using M&A firms are able to persist with the innovation efforts and output over time, and this effect is especially strong for large firms. For small firms, M&A help them to cross the ‘innovation threshold’, increasing the probability of the transition from a non-innovator to an active innovator. However, the M&A effect does not mitigate the tendency of small firms to be occasional innovators.

Keywords: Mergers and acquisitions; Innovation; Small and medium sized enterprises; Dynamic random effect probit models; Multiplicative interaction models (search for similar items in EconPapers)
JEL-codes: C14 D21 L11 L25 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0048733314001851
Full text for ScienceDirect subscribers only

Related works:
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:eee:respol:v:44:y:2015:i:3:p:698-710

DOI: 10.1016/j.respol.2014.10.010

Access Statistics for this article

Research Policy is currently edited by M. Bell, B. Martin, W.E. Steinmueller, A. Arora, M. Callon, M. Kenney, S. Kuhlmann, Keun Lee and F. Murray

More articles in Research Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().