Killer acquisitions and beyond: policy effects on innovation strategies
Armin Schmutzler () and
No 358, ECON - Working Papers from Department of Economics - University of Zurich
This paper provides a theory of strategic innovation project choice by incumbents and start-ups which serves as a foundation for the analysis of acquisition policy. We show that prohibiting acquisitions has a weakly negative innovation effect. We provide conditions determining the size of the effect and, in particular, conditions under which it is zero. We further analyze the effects of less restrictive policies, including merger remedies and the tax treatment of acquisitions and initial public offerings. Such interventions tend to prevent acquisitions only if the entrant has sufficiently high stand-alone profits.
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)
Date: 2020-08, Revised 2021-10
New Economics Papers: this item is included in nep-com, nep-ino and nep-tid
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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 (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:zur:econwp:358
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