Killer Aquisitions and Beyond: Policy Effects on Innovation Strategies
Armin Schmutzler (),
Igor Letina and
VfS Annual Conference 2021 (Virtual Conference): Climate Economics from Verein für Socialpolitik / German Economic Association
This paper provides a theory of strategic innovation project choice by incumbents and start-ups. We show that prohibiting killer acquisitions strictly reduces the variety of innovation projects. By contrast, we find that prohibiting other acquisitions only has a weakly negative innovation effect, and we provide conditions under which the effect is zero. Furthermore, for both killer and other acquisitions, we identify market conditions under which the innovation effect is small, so that prohibiting acquisitions to enhance competition would be justified.
Keywords: innovation; killer acquisitions; merger policy; potential competition; start-ups (search for similar items in EconPapers)
JEL-codes: G34 L41 O31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-ino, nep-reg and nep-sbm
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Working Paper: Killer Acquisitions and Beyond: Policy Effects on Innovation Strategies (2021)
Working Paper: Killer acquisitions and beyond: policy effects on innovation strategies (2021)
Working Paper: Killer Acquisitions and Beyond: Policy Effects on Innovation Strategies (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc21:242420
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