Abstract

http://ssrn.com/abstract=2181152
 
 

References (1)



 
 

Citations (5)



 
 

Footnotes (28)



 


 



R&D and the Incentives from Merger and Acquisition Activity


Gordon M. Phillips


Tuck School of Business at Dartmouth; National Bureau of Economic Research (NBER)

Alexei Zhdanov


Pennsylvania State University

August 15, 2012


Abstract:     
We provide a model and empirical tests showing how an active acquisition market affects firm incentives to innovate and conduct R&D. Our model shows that small firms optimally may decide to innovate more when they can sell out to larger firms. Large firms may find it disadvantageous to engage in an "R&D race" with small firms, as they can obtain access to innovation through acquisition. Our model and evidence also shows that the R&D responsiveness of firms increases with demand, competition and industry merger and acquisition activity. All of these effects are stronger for smaller firms than for larger firms.

Number of Pages in PDF File: 65

Keywords: mergers, innovation, R&D

JEL Classification: O31, O32, G34, D43, L13


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Date posted: November 27, 2012  

Suggested Citation

Phillips, Gordon M. and Zhdanov, Alexei, R&D and the Incentives from Merger and Acquisition Activity (August 15, 2012). Available at SSRN: http://ssrn.com/abstract=2181152 or http://dx.doi.org/10.2139/ssrn.2181152

Contact Information

Gordon M. Phillips (Contact Author)
Tuck School of Business at Dartmouth ( email )
Hanover, NH 03755
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Alexei Zhdanov
Pennsylvania State University ( email )
University Park
State College, PA 16802
United States
HOME PAGE: http://www.alexeizhdanov.com
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