Acquisitions as catalysts for inventor departures in the biotechnology industry

Luca Verginer (), Federica Parisi, Jeroen Lidth de Jeude and Massimo Riccaboni
Additional contact information
Luca Verginer: Chair of Systems Design at ETH Zürich
Federica Parisi: IMT School for Advanced Studies Lucca
Jeroen Lidth de Jeude: IMT School for Advanced Studies Lucca
Massimo Riccaboni: IMT School for Advanced Studies Lucca

Palgrave Communications, 2025, vol. 12, issue 1, 1-12

Abstract: Abstract In high-tech industries, where intellectual property is crucial, the acquisition of intangible assets and tacit knowledge of employees is one of the main motivations for Mergers and Acquisitions (M&As). The takeover wave in the biotechnology industry in the 1990s following the molecular biology revolution is a well-known example of how M&As were used to absorb new knowledge. However, after an M&A, it is uncertain whether key R&D employees who embody valuable knowledge and potential future innovations can be retained. Even if not all employees are relevant to the success of the acquisition, inventors are among the most valuable. This is especially true when acquiring an innovative startup. In this paper, we estimate how likely it is that an inventor working for an acquired biotechnology company will leave. Using a difference-in-differences approach with matching for both firms and inventors. We find that inventors affected by acquisitions are 20% more likely to leave the company. Our results contribute to the current debate on acqui-hiring of high-tech startups.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1057/s41599-025-04894-w Abstract (text/html)
Access to full text is restricted to subscribers.

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:pal:palcom:v:12:y:2025:i:1:d:10.1057_s41599-025-04894-w

Ordering information: This journal article can be ordered from
https://www.nature.com/palcomms/about

DOI: 10.1057/s41599-025-04894-w

Access Statistics for this article

More articles in Palgrave Communications from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().