TY - JOUR
T1 - Technological similarity in acquisitions and innovative performance revisited
T2 - Does the nature of technology matter?
AU - Chondrakis, Georgios
AU - Farchi, Tomas
N1 - Publisher Copyright:
Copyright © 2014 by Emerald Group Publishing Limited.
PY - 2014
Y1 - 2014
N2 - This article explores the effect of technological similarity in acquisitions on invention quantity and quality. In doing so, we confirm previous findings in the literature suggesting that technological similarity exhibits an inverted U-shaped relationship with innovative output and a negative relationship with average invention quality. However, we identify the nature of the technology as an important moderating factor for both relationships. We distinguish between two types of technologies, complex and discrete, and suggest that at high levels of technological similarity, invention quantity and average quality increase more in complex technology industries as compared to discrete technology industries. These effects are attributed to innovation cumulativeness and the interdependencies developed between patent rights in complex technology settings. A study of acquisition and patenting activity in two industries over a sixteen-year period provides empirical support to our claims.
AB - This article explores the effect of technological similarity in acquisitions on invention quantity and quality. In doing so, we confirm previous findings in the literature suggesting that technological similarity exhibits an inverted U-shaped relationship with innovative output and a negative relationship with average invention quality. However, we identify the nature of the technology as an important moderating factor for both relationships. We distinguish between two types of technologies, complex and discrete, and suggest that at high levels of technological similarity, invention quantity and average quality increase more in complex technology industries as compared to discrete technology industries. These effects are attributed to innovation cumulativeness and the interdependencies developed between patent rights in complex technology settings. A study of acquisition and patenting activity in two industries over a sixteen-year period provides empirical support to our claims.
KW - Innovation
KW - Patents
KW - Technological similarity
KW - Technology acquisitions
UR - http://www.scopus.com/inward/record.url?scp=84911425855&partnerID=8YFLogxK
U2 - 10.1108/S1479-361X20140000013002
DO - 10.1108/S1479-361X20140000013002
M3 - Article
AN - SCOPUS:84911425855
SN - 1479-361X
VL - 13
SP - 43
EP - 64
JO - Advances in Mergers and Acquisitions
JF - Advances in Mergers and Acquisitions
ER -