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How resource information backgrounds trigger post-merger integration and technology innovation? A dynamic analysis of resource similarity and complementarity

Feiqiong Chen (), Qiaoshuang Meng and Fei Li
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Feiqiong Chen: Zhejiang University
Qiaoshuang Meng: Zhejiang University
Fei Li: Zhejiang University

Computational and Mathematical Organization Theory, 2017, vol. 23, issue 2, No 1, 167-198

Abstract: Abstract Overseas mergers and acquisitions (M&A) proposed by companies from emerging economies have been aiming to secure outward technology sourcing from developed countries in order to improve their technology innovation abilities in recent years. This paper proposes a comprehensive analytical framework of post-merger integration’s influence on technology innovation by global game modeling. We show how different resource similarity and resource complementarity backgrounds of the acquirer and target companies can affect post-merger strategies and technology innovation output through multi-stage analysis with an asymmetrical payoff structure. We focus on two main dimensions of post-merger integration, which are integration degree and target autonomy. Equilibrium analysis that is based on potential innovation output signals show that resource similarity has a positive relation with integration and a negative relation with target autonomy in overseas M&A; however, resource complementarity has the opposite effects compared with resource similarity. The positive interaction between resource similarity and complementarity will trigger more M&A and increase the degrees of integration and autonomy; M&A integration has a positive impact on technology innovation output. The innovation growth of the acquiring company is affected by the effectiveness of the post-merger process and the interaction of substitution elasticity with resource potential difference. Our study provides insight into the factors driving post-merger decisions and contributes to a multi-stage resource-based understanding of technology innovation induced by overseas post-merger integration.

Keywords: Post-merger integration; Technology innovation; Resource similarity; Resource complementarity (search for similar items in EconPapers)
Date: 2017
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