Abstract
The existence of an inverted U‐shaped effect of the relatedness between acquirer and acquired firm on the innovative performance subsequent to an acquisition is normally regarded as indicative of the existence of a trade‐off between exploration and exploitation in external innovation search. We argue that acquirers endowed with heterogeneous learning capabilities can alter the shape of the trade‐off to their favor. In particular, we focus on a notion of industry relatedness that captures the coherence between the domains of operation of the acquirer and the acquired firm. Using a longitudinal dataset of 1,736 domestic acquisitions in the Netherlands, we show that the heterogeneous learning capabilities of the acquirers alter the shape of the inverted‐U relationship, according to first‐ and second‐order moderating effects. Our results confirm that learning capabilities by internal R&D and by acquisition experience both improve what acquirers can achieve in innovative performance when industry relatedness is at the point of balance between exploration and exploitation. In contrast, they have opposite implications on the potential losses in innovative performance when industry relatedness is outside the point of balance: internal R&D increases the tolerance of the trade‐off, smoothing out potential innovation losses, whereas acquisition experience reduces it.
| Original language | English |
|---|---|
| Pages (from-to) | 210-245 |
| Number of pages | 36 |
| Journal | Journal of management studies |
| Volume | 57 |
| Issue number | 2 |
| Early online date | 1 Mar 2019 |
| DOIs | |
| Publication status | Published - 1 Mar 2020 |
Bibliographical note
Funding Information:We thank the JMS editors and three anonymous reviewers for their helpful comments and excellent guidance. We are also grateful to Oliver Alexy, Panos Desyllas, Keld Laursen, Larissa Rabbiosi, Thomas R?nde, and participants in the AoM, DRUID, ENEF, EURAM and SIEPI conferences, and seminars at the universities of Aarhus, Bergamo, Piacenza, and Rotterdam, for valuable feedback on earlier versions of this manuscript. The empirical part of this research was carried out at Microdata ? Centraal Bureau voor Statistiek (CBS), the Netherlands. The views expressed in this paper are those of the authors and do not necessarily reflect the policies of Statistics Netherlands. Elena Cefis acknowledges financial support from the University of Bergamo (grants ex 60 per cent, n. 60CEFI17 and n. 60CEFI18, Dept. of Management, Economics, and Quantitative Methods).
Publisher Copyright:
© 2019 Society for the Advancement of Management Studies and John Wiley & Sons, Ltd.