Mergers and Acquisitions

Mergers and Acquisitions

The Innovation Impact

Edited by Bruno Cassiman and Massimo G. Colombo

This book examines the issue of mergers and acquisitions (M & As) in the context of technological development, and in particular the impact of M & As on the innovation process. In so doing, the book integrates two bodies of literature, on M & As, and on innovation studies, a nexus which the editors contend represents an important step in the advancement of our understanding of both with clear implications for competitive advantage and growth of firms. Drawing on perspectives from both management and economics, the book offers a cohesive blend of theory, methodology, and a wealth of empirical material.

Chapter 3: Evolution of Markets, Technology and M & A

John Cantwell and Grazia D. Santangelo

Subjects: business and management, organisational innovation, economics and finance, economics of innovation, industrial economics, innovation and technology, economics of innovation, organisational innovation


3. Evolution of markets, technology and M&A John Cantwell and Grazia D. Santangelo 3.1 INTRODUCTION As described in Chapter 2, the late 1990s witnessed a major merger and acquisition (M&A) wave in terms of both the value of the deals and the number of cross-border M&A. The magnitude of this phenomenon has raised questions related to why M&A occur and how M&A have affected the outcome of corporate research and development (R&D) in terms of technological performance and R&D productivity. Although M&A appear to occur to different extents across different sectors, in this chapter we argue that the boom in M&A is a general phenomenon generated by new global conditions. The factors generating such conditions are classified as trends linked to the transformation of markets (e.g. the flourishing of regulatory shifts) and technology (i.e. the emergence of new business and market opportunities, the rise of technological interrelatedness, and the establishment of new communications and cross-border restructuring). Therefore, it is held that M&A can be understood as a corporate strategy at an international as well as a national and sub-national level to better cope with these new global conditions. The impact of these trends in encouraging new partnerships can be related to both the non-innovation and innovation related motives for M&A deals respectively. However, as it will be argued in the following chapters of this book, the impact of M&A on the outcome of corporate...

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