M&A and Technological Expansion

Ginger Zhe Jin, Mario Leccese and Liad Wagman

No 31126, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We examine how public firms listed in North American stock exchanges acquire technology companies during 2010-2020. Combining data from S&P, Refinitiv, Compustat, and CRSP, and utilizing a unique S&P taxonomy that classifies tech M&As by tech categories and business verticals, we show that 13.1% of public firms engage in any tech M&A in the S&P data, while only 6.75% of public firms make any (tech or non-tech) M&A in Refinitiv. In both datasets, the acquisitions are widespread across sectors of the economy, but tech acquirers in the S&P data are on average younger, more investment efficient, and more likely to engage in international acquisitions than general acquirers in Refinitiv. Within the S&P data, deals in each M&A-active tech category tend to be led by acquirers from a specific sector; the majority of target companies in tech M&As fall outside the acquirer’s core area of business; and firms are, in part, driven to acquire tech companies because they face increased competition in their core areas.

JEL-codes: D04 D22 L1 (search for similar items in EconPapers)
Date: 2023-04
New Economics Papers: this item is included in nep-com, nep-ind, nep-reg and nep-sbm
Note: IO
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Published as Ginger Zhe Jin & Mario Leccese & Liad Wagman, 2024. "M&A and technological expansion," Journal of Economics & Management Strategy, vol 33(2), pages 338-359.

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