The impact of FDI through mergers and acquisitions on innovation in target firms
This paper analyzes the effects of cross-border mergers and acquisitions on innovation activities in target firms. The empirical analysis is based on survey and ownership data for a large sample of small- and medium-sized German firms. After controlling for endogeneity and selection bias, we find th...
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Veröffentlicht in: | International journal of industrial organization 2011-03, Vol.29 (2), p.155-167 |
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Format: | Artikel |
Sprache: | eng |
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Zusammenfassung: | This paper analyzes the effects of cross-border mergers and acquisitions on innovation activities in target firms. The empirical analysis is based on survey and ownership data for a large sample of small- and medium-sized German firms. After controlling for endogeneity and selection bias, we find that foreign acquisitions have a large negative impact on the propensity to perform innovation activities and a negative impact on average R&D expenditures in innovative firms. Furthermore, innovation output, measured as product and process innovations, and the share of sales from product innovations, is not significantly affected by a foreign acquisition for a given amount of innovation efforts. Hence, the estimation results do not provide any evidence of significant technology transfer through foreign acquisitions in form of a higher innovation success. |
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ISSN: | 0167-7187 1873-7986 |
DOI: | 10.1016/j.ijindorg.2010.06.003 |