The Restructuring of Technological Capabilities through Corporate Expansion

Grazia Santangelo and John Cantwell

No 10-18, DRUID Working Papers from DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies

Abstract: This paper analyses the restructuring of technological capabilities following M&A-based growth in large industrial firms with a substantial technological knowledge base. In particular, we focus on the restructuring of those technological capabilities that are of a general purpose kind (namely ICT) or related to the core capabilities of a firm. We develop and test a conceptual framework grounded on a co-evolutionary view, that relates the motivations and environment for corporate expansion to the firm-specific pattern of restructuring in the composition of corporate technological capabilities. We find that distinct patterns of technological capability restructuring are associated with each combination of the motivations and environment for firm growth. In particular, inter-industry contexts reduce technological relatedness in market motivated expansions, while relatedness has also declined in more recent technology-motivated growth in general. The acquisition of ICT is common as well to both technology-motivated inter-industry deals and more recent market-motivated deals. However, we speculate that any similarities in the outcomes of these alternative motives for firm growth arise for quite different purposes.

Date: 2010
New Economics Papers: this item is included in nep-bec and nep-cse
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