Technological similarity,post-acquisition R&D reorganization,and innovation performance in horizontal acquisitions |
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| Authors: | Massimo G Colombo Larissa Rabbiosi |
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| Institution: | 1. Department of Management, Economics and Industrial Engineering, Politecnico di Milano, Via Lambruschini, 4b, 20156 Milan, Italy;2. Department of International Economics and Management, Copenhagen Business School, Porcelaenshaven 24A, DK2000 Frederiksberg, Denmark |
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| Abstract: | This paper aims to disentangle the mechanisms through which technological similarity between acquiring and acquired firms influences innovation in horizontal acquisitions. We develop a theoretical model that links technological similarity to: (i) two key aspects of post-acquisition reorganization of acquired R&D operations – the rationalization of the R&D operations and the replacement of the R&D top manager, and (ii) two intermediate effects that are closely associated with the post-acquisition innovation performance of the combined firm – improvements in R&D productivity and disruptions in R&D personnel. We rely on PLS techniques to test our theoretical model using detailed information on 31 horizontal acquisitions in high- and medium-tech industries. Our results indicate that in horizontal acquisitions, technological similarity negatively affects post-acquisition innovation performance and that this negative effect is not mediated by the reorganization of the acquired R&D operations. However, replacing the acquired firm's R&D top manager leads to R&D productivity improvements that positively affect innovation performance. |
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| Keywords: | Technological similarity Horizontal acquisitions Post-acquisition innovation performance Post-acquisition R& D reorganization R& D productivity Disruptions of R& D personnel |
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