Can international acquisition be an effective way to boost innovation in developing countries?: Evidences from China's TFT‐LCD industry

Purpose - The purpose of this paper is to examine the effects of international acquisition activities on performance and its role in innovation build-up in developing countries. Design/methodology/approach - A case study was used to understand the deep integration process of acquisition process. The theory behind the study is the relationship of innovation management and merger and acquisition activities. Findings - Acquiring a company with higher technologies has more risks and it requires the acquiring company to master a fast learning capability. The key to a successful international technology acquisition for a developing country is to leverage technology dynamics and build up a high-level learning capability to absorb tacit knowledge. Research limitations/implications - An in-depth case study was adopted. Further quantitative research may be needed to test our research outcome here. Practical implications - The case study may provide valuable reference for the companies aiming to catch up via international acquisition in the developing countries. Originality/value - First, this paper is to enrich literature on acquisition research from a technological perspective. Second, fast learning capability, especially the capability to absorb tacit knowledge, is the key to a successful acquisition when a lagging-behind company in the developing country wants to catch up a leading one.