Market and technology access through firm acquisitions: Beyond one size fits all

Abstract

Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp08037.pdf larger targets may provide better access to markets and established products as these firms typically also have a higher market share and a better distribution network. Non-technical summaryLarger acquisitions should hence also tend to be cross-border rather than domestic.Given this heterogeneity of takeover motivations and the skewness of the distribution of the deal value we investigate whether standard estimation procedures that focus on the average acquisition target in order to unveil the underlying takeover motivation show the complete picture. AbstractFirm acquisitions have been shown to serve as a way to gain access to international markets, technological assets, products or other valuable resources of the target firm.Given this heterogeneity of takeover motivations and the skewness of the distribution of the deal value we show whether and how the importance of different takeover motivations changes along the deal value distribution. Based on a comprehensive

Entrepreneurial acquisitions, open innovation and UK high growth SMEs

“…Acquisition is often considered the domain of large conglomerate firms (King et al, 2004), while SMEs are thought to engage in organic growth (McKelvie et al 2006). There is now, however, a growing body of evidence that indicates that acquisition is becoming increasingly commonplace in SMEs (Grimpe and Hussinger, 2008), including rapidly growing firms (McKelvie and Wiklund, 2010), with technological acquisition a key driver of this process (Hussinger, 2010;Arvanitis and Stucki, 2014). Despite these observations, little research has specifically examined the underlying rationale and dynamics of entrepreneurial acquisitions undertaken by rapidly growing SMEs.…”

High Risk or Low Cost – Dichotomous Choices of R&D Strategy by Startups in Markets for Technology

“…Sellers in these markets are both large companies looking for ways to improve revenues and small startups with limited possibilities to commercialize the technologies themselves. On the side of buyers, incumbent firms frequently acquire the technologies of small, innovative startups in order to stay ahead and to preempt competition (Bloningen and Taylor 2000, Grimpe and Hussinger 2008, 2009, Hall 1990, Lehto and Lehtoranta 2006, Lerner and Merges 1998. Our study provides a more fine-grained understanding of technology-focused acquisitions by incumbents, explaining why minor technologies may also be subject to such acquisitions.…”

High risk or low cost - Dichotomous choices of R&D strategy by startups in markets for technology

“…Sellers in these markets are both large companies looking for ways to improve revenues and small startups with limited possibilities to commercialize the technologies themselves. On the side of buyers, incumbent firms frequently acquire the technologies of small, innovative startups in order to stay ahead and to preempt competition (Bloningen and Taylor 2000, Grimpe and Hussinger 2008, 2009, Hall 1990, Lehto and Lehtoranta 2006, Lerner and Merges 1998. Our study provides a more fine-grained understanding of technology-focused acquisitions by incumbents, explaining why minor technologies may also be subject to such acquisitions.…”