A new discussion on the relationship between M&A and innovation in an emerging market: the moderating effect of post-acquisition R&D investment. Issue 12 (2nd December 2019)

• Record Type: Journal Article
• Authors: Zhao, Xi; Lin, Delin; Hao, Ting
• Is Part Of: Technology analysis & strategic management. Volume 31:Issue 12(2019)
• Page Start: 1447
• Page End: 1461
• Publication Date: 2019-12-02
• Subjects: Mergers and acquisitions (M&A) size -- Chinese firms -- post-acquisition R&D investment -- innovation performance; O30 -- G34 -- L63; Technological innovations -- Management -- Periodicals; Research, Industrial -- Management -- Periodicals; High technology industries -- Management -- Periodicals; Strategic planning -- Periodicals; 658.401205
• DOI: 10.1080/09537325.2019.1627310
• Languages: English
• ISSNs: 0953-7325

Abstract

ABSTRACT: Based on the framework of 'M&A size-integration process-innovation outputs', we re-examine the relationship between M&A and post-acquisition innovation performance, and the moderating effect of post-acquisition R&D investment. Using zero-inflated negative binomial regression with data on mergers and acquisitions of 277 high-tech firms in China from 2005 to 2015, we found that M&A size has an inverted U-shaped effect on post-acquisition innovation performance. Post-acquisition R&D investment shows a significant moderating effect on this inverted U-shaped relationship, and puts the inflection point of the inverted U-shaped curve to the right from 23% to 39%. Thus, for the acquiring firm, increasing the post-acquisition R&D investment level can effectively improve its technology absorption capacity, thereby extending the positive effect interval of M&A size on its post-acquisition innovation performance.