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Cross-Border M&A and Innovative Activity: Firm-Level Evidence

Joel Stiebale

VfS Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century from Verein für Socialpolitik / German Economic Association

Abstract: This paper provides empirical evidence on the relationship between cross-border mergers and acquisitions (M&A) and innovation. For the empirical analysis a unique firm-level data set is constructed that combines balance sheet data and an M&A database with information on patent applications. Within three years after a cross-border M&A, patent applications filed by the merged entity increase by more than 30%. Splitting patent applications by the inventors country it is found that the positive association with post-merger patenting is mainly driven by patents invented in the countries of the acquirers headquarter and its previous subsidiaries. In contrast, there is on average a decrease in patent applications invented in the targets country of more than 60%. Accounting for endogeneity of international acquisitions by estimating dynamic count data models and applying instrumental variable techniques, the results indicate that part of this correlation stems from a causal effect.

JEL-codes: D22 F23 G34 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-com, nep-cse, nep-ind, nep-ino, nep-sbm and nep-tid
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