Startup acquisitions and innovation∗

Christopher Teh () and Chengsi Wang ()
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Christopher Teh: Toulouse School of Economics, France & School of Economics
Chengsi Wang: Department of Economics and Monash Digital Lab, Monash University

No 2025-14, Monash Economics Working Papers from Monash University, Department of Economics

Abstract: This survey explores how startup acquisitions influence innovation and competition. We review two key streams of literature: post-acquisition innovation, which examines whether incumbents develop or terminate acquired projects, and pre-acquisition innovation, which investigates how the prospect of acquisition shapes startups’ and incumbents’ incentives and innovation strategies. We also assess the implications for merger policy design, highlighting recent competition authority responses and dynamic considerations. Our work provides insights into the ongoing debate on how competition policy should regulate startup acquisitions in fast-evolving and uncertain markets.

Keywords: acquisition; innovation; merger policy; startup (search for similar items in EconPapers)
JEL-codes: G34 L12 L41 O3 (search for similar items in EconPapers)
Date: 2025-11
New Economics Papers: this item is included in nep-com, nep-ind, nep-ino, nep-ppm, nep-reg and nep-sbm
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