Sourcing technological knowledge through corporate acquisition

Evidence from an International sample of high technology firms

P Desyllas, Alan Hughes

Research output: Contribution to journalArticle

34 Citations (Scopus)

Abstract

We investigate the prevalence of the motive to source technological knowledge externally through corporate acquisition. Drawing on make-or-buy and organizational learning theories, we infer the implications of this explanation for the acquirers' pre-acquisition innovative characteristics. Using an international sample of 6106 high technology acquisitions during 1984–2000, we assess the contribution of innovative characteristics to the acquisition likelihood. For firms acquiring small private firms and former subsidiaries—but not public targets—the evidence is consistent with three propositions: (1) A firm's commitment to internal R&D is negatively affected by the decision to acquire; (2) Low R&D productivity increases the likelihood of acquisition; (3) A large knowledge stock predisposes firms to acquire because they perceive they are capable of selecting and absorbing targets. We conclude that acquisitions of small private firms and former subsidiaries are a viable R&D strategy to explore a range of potential future innovation trajectories for large public firms.
Original languageEnglish
Pages (from-to)157–172
Number of pages16
JournalJournal of High Technology Management Research
Volume18
Issue number2
DOIs
Publication statusPublished - 2007

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Innovation
Productivity
Trajectories
Technological knowledge
Corporate acquisitions
High-technology firms
Sourcing
Subsidiaries
Private firms

Cite this

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