What They Know vs. What They Do: How Acquirers Leverage Technology Acquisitions
Strategic Management Journal, Forthcoming
53 Pages Posted: 23 Aug 2006
Existing research suggests that in acquisitions of small technology based firms by large established firms, post merger integration both enables and hinders acquirer's efforts to leverage the technology of acquired firms. This apparent paradox can be resolved once we account for the qualitatively distinct ways in which acquirers leverage technology acquisitions. Integration helps acquirers use the acquired firm's existing knowledge as an input to their own innovation processes (leveraging what they know), but hinders their reliance on the acquired firm as an independent source of ongoing innovation (leveraging what they do). We also show that experienced acquirers are better able to mitigate the disruptive consequences of the loss of autonomy entailed by integration, though we find no evidence that they achieve greater coordination benefits from integration.
Keywords: Technology acquisitions, Post-merge Integration, Coordination
JEL Classification: L20, M10
Suggested Citation: Suggested Citation