Highly skilled and well connected: Migrant inventors in cross-border M&As

Abstract

Based on a relational view of international business, we investigate the role of migrant inventors in Cross-Border Merger & Acquisitions (CBM&As) undertaken by R&D-active firms. We hypothesize that the migrant inventors' international social networks can be leveraged upon by their employers in order to spot and/or integrate the knowledge bases of acquisition targets in the inventors' home country. We nuance our hypothesis by means of several conditional logistic regressions on a large matched sample of deals and control cases. The impact of migrant inventors increases with the distance between countries and for targets located in countries with weak administrative/legal systems, as well as when targets are either innovative or belong to high-tech sectors or to the same sector as the acquirer, and for full versus partial acquisitions.

Inventor migration and knowledge flows: A two-way communication channel?

“…Third, more migrants contribute to more culturally diverse societies, alongside the increased creativity and complexity that goes with it (Alesina et al, 2016;Bosetti et al, 2015;Ferrucci and Lissoni, 2019;Kemeny and Cooke, 2018). Fourth, they may also favor inward FDI (Hernandez, 2014) as well as cross-border acquisitions (Useche et al, 2019). This may affect the innovation potential of the firms involved.…”

Ties that bind: Ethnic inventors in multinational enterprises’ knowledge integration and exploitation

“…Furthermore, we explore this bridging function in the context of both knowledge integration and knowledge exploitation. Specifically, we posit that thanks to the unique ties that bind them to the MNE's host country (CoO) (Useche et al, 2019), own-ethnic inventors can improve the access to, and transfer of valuable knowledge inputs that are deeply embedded in this country. In turn, this facilitates (i) the integration of such inputs into the MNE's knowledge base (knowledge integration hypothesis) and (ii) the local usage of the resulting new technology (knowledge exploitation hypothesis).…”

Making connections: Social networks in international business

“…In a context in which key actors are intensively networked, either locally or globally or both, we need a holistic understanding of the behavior of the wider relational system of multiple actors of different types of which they are part (Bathelt & Glückler, 2011). Thus, for instance, the international knowledge networks of migrants may influence the geographic structure of the cross-border mergers and acquisitions undertaken by the R&D-intensive firms that employ skilled migrants (Useche, Miguelez, & Lissoni, 2020).…”

“…Here, we provide a brief summary of the key insights and contributions of these papers (ordered by the level of analysis). Useche et al (2020) focus on migrant networks. Their study is the only one in this special issue that focuses on individual-level networks.…”