Evaluating post-acquisition technological performance by measuring absorption-related invention

Luigi Orsi, Andrea Ganzaroli, Ivan De Noni and Federica Marelli

International Journal of Entrepreneurship and Innovation Management, 2016, vol. 20, issue 1/2, 117-146

Abstract: Mergers and acquisitions (M%As) form a strategic response to the increasing rapidity of technological change, enabling firms to exploit the potential embodied in external sources of knowledge and rapidly adapt to changing market conditions. However, the success of this strategy critically depends on acquirers' absorptive capacity. Even if there is common agreement on the role of absorptive capacity, only a few researchers have attempted to investigate how it works in an M%A. To this purpose, we introduce the concept of absorption-related invention as a way to evaluate how, and the extent to which, the knowledge acquired in an M%A is assimilated and transformed into new sources of innovation. Our analysis shows that absorption-related invention positively affects invention performance post-M%A. This effect is stronger in the case of novelty rather than quantity. Furthermore, the roles of technological complementarity, technological similarity, and managerial experience have been tested in relation to both invention performance and absorption-related invention. Our findings confirm the relevance of these factors and suggest that the assimilation of similar technological assets might be important to support the development of novel trajectories of innovation through absorption-related invention.

Keywords: mergers and acquisitions; M%As; absorptive capacity; absorption-related invention; innovation performance; post-acquisition performance; technological performance; technological change; technological complementarity; technological similarity; managerial experience; assimilation. (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (1)

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