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Author: Yu Yu
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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While innovation and growth can be promoted internally through focus on research and development (R&D), many firms find acquisition from external sources to be a speedy and attractive alternative. Despite the numerous theories of merger and acquisition (M&A) in the literature, no empirical study has tackled the problem of target selection in an acquisition. The existing studies on M&A outcomes also fail to control for the endogenous matching between the acquirer and the target. Essay 1 of this dissertation is the first to study the target selection criteria in an empirical setting. It quantifies the elusive concept of synergy by developing new measures of similarity and complementarily between the acquirer and the target that are more comprehensive than the existing measures in the literature. Using an innovative application of the discrete choice model, I find that firms use acquisition to promote growth and innovation in areas of strategic interest. Specifically, acquirers choose target firms whose product markets match their own R&D projects, and target firms whose R&D projects match their own product markets. Essay 2 enriches the modeling approach for merger partner selection in essay 1. I use a game-theoretic matching model and study the impact of matching on merger performance. With a Bayesian estimation method, I apply the model to 1895 mergers in five high-tech industries that occurred between 1992 and 2008. I find that the unobserved strategic fit between the two merging partners has a significant effect on the post-merger innovation abilities of the combined firm. Managers wisely choose merger partners that deepen their technical knowledge, but under-estimate the challenges in integrating foreign partners and partners with similar technology. I also find evidence of estimation bias due to matching induced endogeneity. Essay 3 of the dissertation is a comprehensive review of the M&A related research published in top marketing journals. This review will provide marketing scholars with a research background on M&A, both in terms of theories and marketing applications of those theories. This review will help readers to appreciate the contribution made by marketing researchers to M&A knowledge, and hopefully inspire more marketing scholars to incorporate M&A topic in their research.
Author: Yu Yu
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
While innovation and growth can be promoted internally through focus on research and development (R&D), many firms find acquisition from external sources to be a speedy and attractive alternative. Despite the numerous theories of merger and acquisition (M&A) in the literature, no empirical study has tackled the problem of target selection in an acquisition. The existing studies on M&A outcomes also fail to control for the endogenous matching between the acquirer and the target. Essay 1 of this dissertation is the first to study the target selection criteria in an empirical setting. It quantifies the elusive concept of synergy by developing new measures of similarity and complementarily between the acquirer and the target that are more comprehensive than the existing measures in the literature. Using an innovative application of the discrete choice model, I find that firms use acquisition to promote growth and innovation in areas of strategic interest. Specifically, acquirers choose target firms whose product markets match their own R&D projects, and target firms whose R&D projects match their own product markets. Essay 2 enriches the modeling approach for merger partner selection in essay 1. I use a game-theoretic matching model and study the impact of matching on merger performance. With a Bayesian estimation method, I apply the model to 1895 mergers in five high-tech industries that occurred between 1992 and 2008. I find that the unobserved strategic fit between the two merging partners has a significant effect on the post-merger innovation abilities of the combined firm. Managers wisely choose merger partners that deepen their technical knowledge, but under-estimate the challenges in integrating foreign partners and partners with similar technology. I also find evidence of estimation bias due to matching induced endogeneity. Essay 3 of the dissertation is a comprehensive review of the M&A related research published in top marketing journals. This review will provide marketing scholars with a research background on M&A, both in terms of theories and marketing applications of those theories. This review will help readers to appreciate the contribution made by marketing researchers to M&A knowledge, and hopefully inspire more marketing scholars to incorporate M&A topic in their research.
Author: Gusang Kang
Publisher:
ISBN:
Category : Consolidation and merger of corporations
Languages : en
Pages : 90
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Author: Vusal Eminli
Publisher:
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Category :
Languages : en
Pages : 0
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Author: Mosab Hammoudeh
Publisher:
ISBN:
Category : Consolidation and merger of corporations
Languages : en
Pages : 0
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In Chapter 2 titled "Seeking efficiency or price gouging? Evidence from pharmaceutical mergers," we show that pharmaceutical mergers are a response to ex-ante competitive pressure, and in turn, reduce product market competition. Although egregious drug price increases are not widespread, merger-induced reduction in competition does help prop up prices. We also find robust support for the efficiency perspective of mergers. Firms with a high product overlap are more likely to merge and mergers are followed by a decline in the price of drugs that are similar across the acquirer and target portfolios. This decline is likely due to efficiency gains in the R&D process and reduction in operating expenses.
Author: Abdullah A. Alshwer
Publisher:
ISBN:
Category : Capital costs
Languages : en
Pages : 258
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Author: 陳翀
Publisher:
ISBN:
Category : Consolidation and merger of corporations
Languages : en
Pages : 109
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Author: Jamie Weathers
Publisher:
ISBN:
Category :
Languages : en
Pages : 91
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This dissertation empirically explores the facets of corporate innovation in the firm and the ultimate effects on firm value. In the first chapter I identify firm innovation as a new channel by which employee treatment affects firm value. Growth and innovation incentive theories support positive effects of "good" employee treatment on innovation. Alternatively, entrenchment theory suggests such treatment will lead to complacency and shirking, hence deterring innovation. These opposing views merit investigation since in the "new economy", human capital is increasingly essential to firm value and the growth and success of a firm has become more reliant on corporate innovation. Using the KLD Research & Analytics, Inc. SOCRATES database and newly acquired patent/citation data, I find an overall significant positive relationship between positive employee treatment and innovation quantity (patents) and quality (citations per patent); both measures are significantly correlated to firm value in the literature. Furthermore, I find that favorable employee treatment improves innovation focus - innovation projects more related to firms' core business. These findings, robust to an alternate data source and endogeneity concerns, are consistent with the theories of growth and innovation incentive and suggest corporate innovation represents a channel by which employee treatment enhances firm value. In the second chapter I use the context of mergers & acquisitions (M&A) to investigate the effect of firm innovative ability. Acquirer announcement returns in M&A are known for being low on average; however, recent studies indicate greater abnormal announcement and long-run returns to firms motivated by the acquisition of innovation. Although acquiring innovation is an important motive for M&A, prior studies have ii mostly focused on the characteristics of target firms. In this paper, I explore the effect of acquirers' innovative abilities in the M&A transaction. I propose that acquirer's ex-ante ability to transform internal and external innovation investment into a tangible valued output (i.e. sales or profitability) is subject to asymmetric information. I apply a unique measure of innovative ability to explain the cross-sectional variation in acquirer returns for mergers and find a positive relation between acquirers' innovative abilities and their abnormal returns around M&A announcements. I further discover that greater CARs in high innovative ability acquirers only exist in a subsample of M&As in the later life cycle of firms. For early merger events (the first three M&As after IPOs), acquirers' innovative abilities are not associated with significantly larger announcement returns, suggesting an altered market perception of the value impact of acquisitions of innovation and innovative ability.
Author: Jessica Calfee Stahl
Publisher:
ISBN:
Category :
Languages : en
Pages : 170
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Abstract: While mergers are highly visible and changes in market structure can have large effects on social welfare, very little empirical work has studied the determinants of merger activity. My dissertation analyzes merger decisions made by firms so as to understand incentives to merge. Chapter 1 uses patent citation data to determine whether firms are more or less actively engaged in sequential innovation after they merge. The ability to capture information spillovers may enhance merged firms' incentives to build upon one another's innovations; yet merging may reduce the firms' incentives to leap-frog one another. Looking at mergers between public companies from 1980 to 2003, I find that in nearly all industries, cross-citations between two firms increase before they merge and then fall after they merge. This suggests that the firms were engaged in an innovation race that was slowed by the merger. Firms may seek out these mergers partly to reduce innovation competition. Chapter 2 exploits an exogenous change in regulation that led to significant consolidation in the broadcast television industry. The vast majority of consolidation was across local markets, so it is not clear what drove consolidation. This chapter uses a panel dataset on ownership and revenue of broadcast stations in order to estimate the revenue advantages of consolidation. I find that revenue advantages come through access to a wider audience, most likely because a firm can offer advertisers more viewers per contract. Chapter 3 uses results from the second chapter, and estimates a dynamic oligopoly model in order to identify the cost advantages of consolidation in the television industry. I infer costs from patterns in ownership changes that are unexplained by revenue estimation. I model firms' decisions as a dynamic game, and estimate the game using a two-step method recently developed by Bajari, Benkard and Levin (2007). This is the first paper to estimate a model of merger activity in a dynamic, strategic framework. I find that owning more stations enables firms to reduce per-station operating costs. A firm's ability to do this is affected by its stations' network affiliations, the location of its stations and the demographic heterogeneity of its viewers.
Author: Souresh Saha
Publisher:
ISBN:
Category :
Languages : en
Pages : 194
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Author: David J. Teece
Publisher: World Scientific
ISBN: 9789810244477
Category : Technology & Engineering
Languages : en
Pages : 528
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Book Description
This book examines the manner in which successful firms develop, transfer, protect, and capture value from technological innovation. In essence, it is about ?knowledge management?, which lies at the foundation of firm level competitive advantage in today's global economy. The essays contain some of the fundamental contributions to the field of knowledge management by one of its best-known thinkers; they also constitute an immensely practical guide for those managers who wish to look below the surface of what is going on in Silicon Valley and elsewhere.
