Technology sourcing through acquisitions: evidence from the US drug industry

Karen Ruckman
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Karen Ruckman: Simon Fraser University, Burnaby, British Columbia, Canada

Journal of International Business Studies, 2005, vol. 36, issue 1, 89-103

Abstract: There were a large number of US drug company takeovers in the 1990s by both foreign and domestic acquirers. Observation of the absolute difference between target and acquirer R&D intensity suggests there is no difference between foreign and domestic technology-sourcing patterns. However, a firm-level estimation of the acquirers' choice of targets reveals that foreign and domestic acquirers differ with respect to the relationship between target and acquirer R&D intensity. Foreign acquirers with low R&D intensity choose targets with high R&D intensities, which suggests technology sourcing as a motivation. Domestic acquirers prefer targets with high R&D intensities the higher their own R&D intensity, which suggests a synergy story. Journal of International Business Studies (2005) 36, 89–103. doi:10.1057/palgrave.jibs.8400110

Date: 2005
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