Is M&A Information Useful for Exploring Promising Industries and Technologies?

Jinho Choi, Sunghun Chung and Yong Sik Chang
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Jinho Choi: School of Business, Sejong University, Seoul 05006, Korea
Sunghun Chung: Leavey School of Business, Santa Clara University, Santa Clara, CA 95053, USA
Yong Sik Chang: Department of IT Management, Hanshin University, Osan 18101, Gyeonggi-do, Korea

Sustainability, 2019, vol. 12, issue 1, 1-19

Abstract: Companies today that seek to diversify their business are looking for opportunities in new markets by considering their core competencies. However, companies are struggling to diversify and grow their current businesses due to a lack of information concerning diversification and a low level of capability for future commercialization. In this study, we suggest a new methodology that identifies promising industry and technology areas by examining mergers and acquisitions (M&As) transaction data. Specifically, by analyzing the extent to which firms have engaged in M&A activities, the prediction of promising industries is derived from the relationships among specific industries, as well as the M&A transactions among technology areas within a focal industry. We first theoretically test whether all M&A transactions are related to promising areas. Second, we analyze the trends of global M&As by a time-series analysis of M&A transactions by sectors over the last 15 years. Lastly, we conduct an association analysis to identify the degree of M&A connections between industry and technology areas, respectively. We hope that our results provide insights for R&D policymakers and investors who need to decide on promising industries to cultivate or invest in, and researchers who want to identify overall M&A trends and promising industries and technology areas.

Keywords: mergers and acquisitions; M&A transaction; promising industry; trend analysis (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
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