Technological overlap, technological capabilities, and resource recombination in technological acquisitions

Abstract

The performance of technological acquisitions depends heavily on the overlap between the knowledge bases of the target and acquirer. We argue that overlap is best viewed as two distinct constructs: target overlap, the proportion of the target's knowledge base that the acquirer already possesses, and acquirer overlap, the proportion of the acquirer's knowledge base duplicated by the target. Each affects the value created from the firms' technological capabilities differently due to absorptive capacity, knowledge redundancy, and organizational disruption. Further, the low quantity of innovations observed in acquisitions with low target overlap may conceal an offsetting increase in their novelty. Copyright © 2013 John Wiley & Sons, Ltd.

Knowledge Creation Process and Sustainable Competitive Advantage: the Role of Technological Innovation Capabilities

“…For businesses, knowledge is fundamental for undertaking technological innovation, expanding the scope of knowledge integration, and improving the ability to create knowledge; this is because knowledge contributes significantly to the improvement and technical level of products [30]. The existence of a business depends on whether it can efficiently create, apply, and commercialize knowledge related to technologies and markets [31]. Knowledge creation can be seen as explicating the knowledge of individuals in an organization into group knowledge.…”

Technology Mergers and Acquisitions in the Presence of an Installed Base: A Strategic Analysis

“…The technological acquisition literature studies how technology innovation affects a firm's pre-acquisition decisions (Zhao, 2009;Ransbotham and Mitra, 2010) and postacquisition management (Puranam et al, 2006;Kapoor and Lim, 2007;Sears and Hoetker, 2014). A recurring interest has been to relate technology similarity and the gap in knowledge bases between the acquiring and target firms with acquisition performance.…”

“…A recurring interest has been to relate technology similarity and the gap in knowledge bases between the acquiring and target firms with acquisition performance. The empirical evidence indicates that redundancy in technology will affect the performance of the acquirer in the market (Ahuja and Katila, 2001;Makri et al, 2010;Sears and Hoetker, 2014). Our study builds on this literature by assuming the acquirer and target firms sell different generations of the same product.…”

“…Hence, the products overlap in the quality space. We add analytical insights to the empirical literature (Puranam et al, 2006;Kapoor and Lim, 2007;Sears and Hoetker, 2014) by scrutinizing novels ways to improve acquisition performance in view of overlapping technology generations. Further, we extend this literature by considering whether market characteristics such as consumer heterogeneity or mix would affect acquisition performance.…”

Do M&A deals create or destroy value? A meta-analysis.

“…The type of M&A is separated into two groups: domestic M&As and crossborder M&As. Because this information is not given in all the studies included in the meta-analysis, 12 out of 35 samples had to be excluded from this moderator analysis (Asimakopoulos & Athanasoglou, 2013;Bouzgarrou & Navatte, 2012;Gleason, McNulty, & Pennathur, 2005;Kengelbach, Roos, & Klemmer, 2013;Kirchhoff & Schiereck, 2011;Kirchhoff et al, 2006;Laabs, 2009;Lehn & Zhao, 2006;Lensink & Maslennikova, 2008;Masulis & Mobbs, 2011;Pauser, 2007;Sears & Hoetker, 2014).…”