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Alliance-to-acquisition transitions: The technological performance implications of acquiring one's alliance partners

Killian J McCarthy and Hendrik Leendert Aalbers

Research Policy, 2022, vol. 51, issue 6

Abstract: Drawing on organizational learning theory, we investigate the technological performance implications of acquiring one's alliance partners. We do so using a sample of 252 firms in four high tech industries, who jointly announced 2,398 acquisitions and filed 125,440 new patent applications, in the period of our analysis. We argue a history of collaboration will allow the acquirer to more easily identify and absorb the target's knowledge, and show that the share of ‘alliance-to-acquisition transitions’, in the total set of the firm's acquisitions, increases the firm's inventive quantity. We also argue that a history of collaboration reduces the opportunity to encounter unknown and unexpected knowledge, which will affect both the type and quality of invention. We find support for the former, and show that the share of alliance-to-acquisition transitions increases the firms exploitative tendencies. In terms of the latter, we find a weak relationship between the share of transitions and overall patent quality, but find that the share of transitions does not affect the number of high quality breakthrough inventions. In so doing, we provide new insights, relevant to the acquisition literature, the literature on transitional governance, and the literature on organisational learning, and position alliance-to-acquisition transitions as a mechanism for altering the firm's technology production function.

Keywords: Mergers and acquisitions; Strategic alliances; Transitional governance; Alliance-to-acquisition transitions; Technological performance; Invention (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1016/j.respol.2022.104512

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