Acquisition through innovation tournaments in high-tech industries: A comparative perspective
Kleer, Robin ; Wagner, Marcus
Kleer, Robin
Wagner, Marcus
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Publication Type
Journal article
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Supervisor
Publication Year
2013
Journal
Economics of Innovation and New Technology
Book
Publication Volume
22
Publication Issue
1
Publication Begin page
73
Publication End page
97
Publication Number of pages
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Abstract
Acquisition of innovative firms is a widely observed phenomenon in high-tech industries. On the basis of distinct advantages of large and small firms, in this paper, we build a tournament model with possible acquisition activity of large firms to derive hypotheses on interdependencies between acquisition frequency and post-acquisition success rates. We find empirical support for our hypotheses that (1) acquisitions increase overall innovation output and (2) that the number of acquisitions is higher in industries with larger heterogeneity between established firms and young start-ups. However, our third hypothesis derived from the formal model that innovation success following from acquisitions varies across industries is only partially confirmed.
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Keywords
Innovation, Tournament, Acquisitions