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This study focuses on intra-industry determinants of acquisition performance. Seven years of printed research on acquisitions from 10 top-tier business journals is categorized on the basis of R&D intensity – that is, per industry classification: high-, medium-, and low-technology – and determinants of acquisition performance. Instead of broadly generalizing acquisition performance determinants across industries, this study focuses on how the practice of enhancing acquisition performance is different per industry classification and what acquiring firms need to take into account.

The globalization of knowledge has driven an increased emphasis on cross-border, high-technology acquisitions where a target firm in a technology industry is acquired by a firm in another nation. However, learning depends on similarity of knowledge, and we find that needed similarity can be provided by either technology or culture. As a result, firms can learn from acquiring targets at increasing cultural distance or at increasing technological distance, but not both. We find an interaction where acquisitions made at longer cultural distances and less technological distance, and acquisitions at shorter cultural distances and greater technological distance improve financial performance. This means technological distance and cultural distance are substitutes or represent a trade-off where improved acquisition performance depends on having commonality (low distance) for one of the variables.

Increasing chances of firm survival requires enduring entrepreneurship or the ability to balance competing demands for exploration and exploitation. We developed how acquisitions can provide needed disruption to change a firm’s dominant orientation toward exploration or exploitation or enable a continued focus on a firm’s dominant orientation. The result is a new typology for acquisition integration associated with different pre- and post-acquisition characteristics. For example, a firm with an exploitation orientation faces different integration challenges in acquiring targets with an exploration or exploitation orientation. We also distinguished between human and task integration to enable more nuanced integration decisions that help to reconcile conflicting findings on acquisition integration decisions. Implications for management research and practice were discussed.

The primary purpose of this study is to explore the impact of acquired ownership in Chinese target firm on the innovation performance of developed economies (DE) acquiring firms. Furthermore, the study aims to empirically investigate the moderating influence of institutional distance between two parties’ home countries.

For the empirical investigation of the hypotheses, the authors identified cross-border technological acquisitions from the Securities Data Company between 1995 and 2015. A hierarchical negative binomial regression technique was used to analyze 177 technological acquisitions completed by DE acquiring firms in China.

Analysis of technological acquisition deals confirmed that acquired ownership undertaken in the Chinese target firms increases the DE acquiring firms’ post-acquisition innovation performance. The authors found that DE acquiring firms underperform in innovation in institutionally distant host countries.

This study contributes to the international business literature by explaining the importance of acquired ownership undertaken in the Chinese target firms for the DE acquiring firm’s innovation performance. Second, institutional theory defines how institutional uncertainty in terms of distance modifies the positive impact of acquired ownership on acquiring firm’s innovation performance.

Taking the literature on knowledge and mergers and acquisitions as a basis, the purpose of this paper is to analyze some variables that influence the knowledge transfer in mergers and acquisitions.

Using data from a sample of 57 domestic Spanish mergers and acquisitions this paper examines the influence on the transfer of knowledge from the acquired firm to the acquiring firm (or lead firm) of: the socially complex nature of the knowledge to be transferred, the knowledge base of the acquiring firm, and two dimensions of the integration process. In addition, the paper analyses the moderating effect of socially complex knowledge on the relationship: dimensions of the integration process‐knowledge transfer.

The results obtained show that the social complexity of the knowledge, the knowledge base existing in the acquiring firm, and the frequency of rich communication media have a positive influence on knowledge transfer.

The results should be interpreted with caution due to the size of the sample. Since the study was conducted in Spain the results could be affected by the cultural context. Further studies are required in order to corroborate the results and to explore these relationships over a longer period of time.

This paper offers several recommendations to help managers to improve knowledge transfer in mergers and acquisitions.

This study tests empirically a model of knowledge transfer in mergers and acquisitions that integrate key factors that can affect knowledge transfer success. This study can help one to understand the knowledge transfer better and complements the very few studies hitherto produced.

Globalization, increasing intensity of competition and access to capital markets have enabled emerging market firms to explore inorganic growth through merger and acquisitions (M & A) over the past two decades. The purpose of this paper is to analyze the role of firm-specific factors on M & A propensity in Chinese technology firms.

The authors analyze data on 152 firms from Mainland China, Hong Kong and Taiwan over a period of 2001-2011 using logistic and count data regression.

The authors find that the factors that influence M & As in these firms differ from the established factors found in M & A in developed economies. Large, low-debt firms have higher acquisition propensity irrespective of their technological strength and they tend to be serial acquirer too.

The findings provide new insights into inorganic growth behavior of emerging market technology firms and indicate presence of both exploitative and exploratory motives.

Emerging economies and technology firms in these economies have witnessed significant increase in mergers and acquisitions (M&A) activities in recent years. The purpose of this paper is to conduct an empirical research on Indian technology firms and analyze the influence of firm-specific factors on firms’ M&A decisions.

A set of 372 Indian firms in the technology sector have been studied for the period 2001-2011, a decade when this sector has seen maximum number of M&A transactions.

The results show that financially strong, low-debt firms with high market capitalization are the typical acquirers in this segment and they tend to be serial acquirer too.

Contrary to established findings in developed economies, the authors find that Indian technology firms’ acquisition decisions are not associated with their R&D activities, opening up scope for investigations on role of technology assets in emerging market firms’ acquisition decisions.

The purpose of this paper is to explore the effects of mergers and acquisitions (M&As) on innovation and profitability in large European firms.

Using information from a unique micro-longitudinal database of top European R&D investors and information from the European Commission (EC) Merger Control Authority, dynamic panel estimations with firm-level fixed effects are performed. Moreover, the paper presents a qualitative case study of a merger in the European electronic and electrical equipment industry.

The analysis of a sample of 562 M&As authorized by the EC Merger Control Authority shows that mergers positively influence the R&D intensity and profitability of top companies in the European Union over the period 2004–2012. Furthermore, empirical evidence shows that the timing and magnitude of these effects differs. In particular, the positive effect of mergers on R&D intensity is found for the short and large term while they influence profitability only in the large term.

This paper makes several contributions. First, unlike other studies on this topic, it investigates the effects of M&As using firm-level panel data on the top 1,000 European R&D companies instead of only examining a case study. Second, a unique data set has been used, which collects information on large European firms from the European Industrial R&D Investment Scoreboard and the EC antitrust authority. Finally, the paper accounts for the casual link between innovation effort and profitability when evaluating the potential effect of M&As on the R&D intensity and profitability of large European firms.

There are multiple perspectives of divestiture and its performance that require reconciliation. While research finds a positive market response to divestment announcement, divestiture of prior acquisitions are generally viewed negatively. The purpose of this paper is to develop and empirically test different explanations for the divestment of prior acquisitions.

This research employs event study to capture market reaction at acquisition announcement and subsequent divestments in a sample of 69 public US high-technology acquisitions between 2003 and 2008 that were divested by 2015. Only initial acquisitions involving public firms were included from the Thomson One Banker SDC database. Public press releases and companies’ SEC filings were reviewed to track divestitures back to prior acquisitions. Ordinary least squared regression was used to estimate coefficients.

Results indicate a positive relation between acquisition and divestiture performance around announcement dates. This finding rejects the correction of mistake explanation, suggesting that a negative stigma surrounding divestments is largely unwarranted and that investors reward capable acquirer’s divestiture decisions.

Investors do not treat all information signals at divestiture equally. For example, acquisitions made by larger and more profitable firms, or acquisitions paid for with stock, are associated with lower return upon divestiture announcement.

This study finds that investors view divestiture as a proactive strategy, suggesting firms can improve performance by actively managing acquisitions and divestments to optimize their portfolio of businesses.

Emerging market MNEs often seek to advance their domestic competitive advantage through a springboard FDI strategy, which typically takes the form of an acquisition into a developed market (DM) for knowledge resources. We argue that if this strategy is effective and beneficial, then an emerging market parent firm would seek for higher ownership and control in its later domestic acquisitions. Such benefits would be higher if there are richer knowledge resources in a DM subsidiary or in a DM local network. Such benefits would also increase over time because of the accumulation of new knowledge back home. Using a sample of 1,303 complete domestic acquisitions made by 713 Turkish firms over the period of 1987–2013, including 196 deals involving a springboard FDI strategy, we have found highly supportive empirical evidence. It is found that holding a DM subsidiary by a Turkish parent firm is associated with 33.047% higher ownership in a later domestic acquisition. Both research and practical implications are discussed.