BUYING VERSUS BUILDING COMPETENCE: ACQUISITION PATTERNS IN THE INFORMATION AND TELECOMMUNICATIONS INDUSTRY 1995–2000

Alfred G. Warner ()
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Alfred G. Warner: Pennsylvania State University — Erie, 5091 Station Road, Erie, PA 16563-1400, USA

International Journal of Innovation Management (ijim), 2003, vol. 07, issue 04, 395-415

Abstract: Acquisitions are widely argued to be an increasingly common solution for technology needs. This paper uses the information and telecommunications industry as background for assessing how technical knowledge and absorptive capacity, the rate of invention and prior acquisition experience affect the likelihood of acquisition. The results indicate that in this standards-based industry, even firms with relevant patent portfolios and R&D expenditures are as likely as less knowledgeable firms to acquire rather than enter the market with internally developed products. The strong predictors of acquisition are experience in acquisitions and the ability to pay. Thus, while the number of acquisitions has increased dramatically, the use of this approach is limited to a small group of firms and is not a widespread solution.

Keywords: Innovation; acquisition; absorptive capacity; industry structure (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (2)

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DOI: 10.1142/S1363919603000866

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