Hiring new key inventors to improve firms' post-M&A inventive output

M. F. Arroyabe, Katrin Hussinger and John Hagedoorn

No 20-029, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: Although merger and acquisitions (M&As) are acknowledged as an important means to access innovative assets and know-how, firms' inventive output often declines in the post-M&A period. Financial, managerial and organizational constraints related to the M&A event contribute to inventive output declines and inventors' departure. Prior literature treats the acquiring firm as a passive observer of invention declines. This study argues that acquiring firms can take measures by hiring new key inventors. We show that the hiring of new key inventors in the post-M&A period can counteract invention declines in two ways. First, these newly hired inventors are associated with an increase of corporate inventive output after the M&A. Second, they are also associated with an improved inventive output of inventors already working for the acquiring firm. These results suggest that an appropriate hiring policy can counteract declining inventive output of firms in the aftermath of M&As.

Keywords: M&A; post-M&A inventive output; key inventors; KBV (search for similar items in EconPapers)
JEL-codes: G34 O32 O34 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Working Paper: Hiring New Key Inventors to Improve Firms’ Post-M&A Inventive Output (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:20029

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