Effects of Technological M&As on Innovative Performance of the Acquiring Company

This paper studies effect of Mergers and Acquisitions (M&A) on innovative performance of the acquiring company from high technology industries for the period from 2010 to 2015. It uses two samples for the analysis: the US sample consist of 180 observations where each acquiring company origins from the USA; the Chinese sample consist of 93 observations where each acquiring company origins from China. Models’ estimation provides several results. First of all, there is significant positive general effect of M&A in high technology environment on innovative performance of the acquiring company both in terms of patent count change and in terms of patent citations change. Secondly, a surprise result is insignificant effect of Relative size of the acquired knowledge base on innovations. Finally, significant positive relationship between Absolute M&A size and innovative performance of the acquiring company and significant negative effect of Relative M&A size on innovations are found within the Chinese sample, while only Relative M&A size brings significant impact within the US sample.