Firm Valuation Effects of High-Tech M&A: A Comparison of New Ventures and Established Firms

35 Pages Posted: 24 Aug 2005

See all articles by Roberto Ragozzino

Roberto Ragozzino

Nova School of Business and Economics

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Date Written: June 2006

Abstract

We examine whether the unique attributes of new ventures lead these firms to experience different M&A outcomes vis-a-vis established organizations. Drawing from a sample of acquisitions of high-technology firms, we present results showing that newly incorporated acquirers experience lower average performance in general, as well as when the target is itself a new venture. Yet, we find that new ventures outperform established firms when the target is a privately-held company. Overall, the findings demonstrate that the challenges and opportunities of firms shift through the first few years of their existence and these changes directly affect the M&A outcomes of acquirers.

Keywords: Entrepreneurship, high tech, acquisition, performance

JEL Classification: G3, M13

Suggested Citation

Ragozzino, Roberto, Firm Valuation Effects of High-Tech M&A: A Comparison of New Ventures and Established Firms (June 2006). Available at SSRN: https://ssrn.com/abstract=785920 or http://dx.doi.org/10.2139/ssrn.785920

Roberto Ragozzino (Contact Author)

Nova School of Business and Economics ( email )

Campus de Carcavelos
Rua da Holanda, 1
Carcavelos, 2775-405
Portugal

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