Information Disclosure and the Market for Acquiring Technology Companies

60 Pages Posted: 19 Jun 2019 Last revised: 2 Jul 2021

See all articles by George Chondrakis

George Chondrakis

ESADE Business School

Carlos J. Serrano

Universitat Pompeu Fabra; Barcelona Graduate School of Economics (Barcelona GSE)

Rosemarie Ham Ziedonis

Boston University - Questrom School of Business

Date Written: December 9, 2020

Abstract

The market for acquiring technology companies is rife with information frictions. Although such frictions can stifle trading activity, they also provide room for strategic gain. We investigate this dual role of information frictions by exploiting an institutional reform that releases technological information to the public domain. Leveraging cross-sectoral variation in the magnitude of disclosure, we find an increase in acquisition activity and in the technological distance between matched pairings. In line with predictions from strategic factor market theory, however, we also find a disproportionate decline in acquirer returns on average. Our findings suggest that information disclosed through the reform facilitated exchange in the takeover market yet had a leveling effect on the returns to acquirers.

Keywords: Mergers and acquisitions, Patent disclosure, Information disclosure, Acquisition performance, AIPA

JEL Classification: O32, O34, G34, G14

Suggested Citation

Chondrakis, George and Serrano, Carlos J. and Ziedonis, Rosemarie Ham, Information Disclosure and the Market for Acquiring Technology Companies (December 9, 2020). Chondrakis, G, Serrano, CJ, Ziedonis, RH. Information disclosure and the market for acquiring technology companies. Strat Mgmt J. 2021; 42: 1024– 1053. https://doi.org/10.1002/smj.3260, Available at SSRN: https://ssrn.com/abstract=3402154 or http://dx.doi.org/10.2139/ssrn.3402154

George Chondrakis

ESADE Business School ( email )

Av. de Pedralbes, 60-62
Barcelona, 08034
Spain

Carlos J. Serrano (Contact Author)

Universitat Pompeu Fabra ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain

HOME PAGE: http://https://sites.google.com/site/carlosjserranoweb

Barcelona Graduate School of Economics (Barcelona GSE) ( email )

Ramon Trias Fargas, 25-27
Barcelona, Barcelona 08005
Spain

Rosemarie Ham Ziedonis

Boston University - Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA MA 02215
United States

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