Session 469

M&As and Innovation

Track X

Date: Tuesday, September 23, 2014

Track I

Time: 11:00 – 12:15

Paper

Room: Roma 2


Session Chair:

  • Maurizio Zollo, Bocconi University

Title: Innovation and Acquisitions in Pharmaceutical Industry Following a Shift in Patent Regime

Authors

  • Shinjinee Chattopadhyay, Columbia University
  • Janet Bercovitz, University of Illinois at Urbana-Champaign

Abstract: Until 1995 the Indian legal system did not recognize product patents, but only process patents, and pharmaceutical firms operating in India enjoyed a weak patent protection regime. The TRIPS Act mandated that both product and process protection would have to be upheld within WTO member countries. The new stronger patent regime began in 2005. We identify three different strategic responses available to Indian firms: (1) exploitation of existing process capabilities in the generic drug market, (2) the pursuit of niche markets, and (3) investment in drug discovery R&D capabilities and participation in the mainstream branded drug market. We develop hypotheses that link each of the above strategies with expected impact on patent activities resulting from broad adoption of the focal strategy, and present preliminary findings.

Title: Keeping it Formal: Strategic Alliances, Acquisitions and Firm Innovation

Authors

  • Michael A. Hitt, Texas A&M University and TCU
  • Duane Ireland, Texas A&M University
  • David Boss, Ohio University
  • Scott Kuban, Texas A&M University
  • Matthew Josefy, Indiana University

Abstract: Our study examines the role that formal alliances and acquisitions play in providing firms access to resources, particularly knowledge. We examine the distinctive effects of different types and number of formal alliances on subsequent acquisitions and innovation. Our sample includes over 800 firms and nearly 4,000 alliances in the telecommunications industry from 1995-2011, as well as over 900,000 associated patents. We find that alliances are frequently precursors to subsequent acquisitions within 2 years. We also demonstrate that formal strategic alliances and acquisitions lead to future innovative activity, as measured by the quantity of patents. However neither alliances nor acquisitions necessarily lead to producing higher quality or more novel patents. Our findings provide an understanding of exploratory and exploitative learning through alliances in high technology industries.

Title: Technological and Product Market Similarities for Post-Acquisition Innovation Performance in High-Tech Industries

Authors

  • Namwoon Kim, Hong Kong Polytechnic University
  • Jongkuk Lee, Ewha Womans University
  • Minyoung Kim, University of Kansas

Abstract: This study explains the impact of the technological and product market similarities between partner firms (i.e., the target and the acquirer) on the post-acquisition innovation performance of the acquirer. Specifically, we propose that this impact is contingent on the configuration of technological and product market similarities and the strategic fit of this configuration with the industry environment. Based on this perspective, we suggest that seemingly conflicting technological aspects of acquisitions (i.e., high versus low technological similarity) do not always exhibit a strategic dilemma caused by the trade-off between the two technological needs (i.e., access to new resources and resource integration), but can be reasonably incorporated into consistent managerial decisions if these two technological needs are analyzed using a context-specific framework.

Title: When Does Acquisition Lead to Breakthrough Knowledge Creation?

Authors

  • H. Dennis Park, Drexel University
  • Michael Howard, Texas A&M University
  • David Gomulya, Nanyang Technological University

Abstract: We explore conditions under which acquiring firms create breakthrough knowledge following an acquisition. Using arguments from knowledge recombination, we argue that acquiring firms are more likely to create breakthrough knowledge when they use acquired knowledge from the target firms, particularly when they combine it with internally-developed knowledge. Moreover, we suggest that human capital specificity plays an important role in acquiring knowledge such that retention of scientists who created the acquired knowledge enhances the likelihood of breakthrough knowledge creation, particularly when the acquired knowledge is complex. Using a sample of 111,227 patents from 301 high-tech firm acquisitions between 1990 and 2000, we find support for our predictions.

All Sessions in Track X...

Sun: 13:45 – 14:30
Session 295: Keynote: Lifetime Achievement Award
Sun: 14:30 – 15:15
Session 471: Keynote: CK Prahalad Award
Sun: 15:45 – 17:00
Session 203: Acquisition Implementation
Session 215: Yikes: What Now (Reloaded)?: Firm Responses to Stakeholder Activism
Session 398: Corporate Strategy and Corporate Finance: Continuing the Research Conversation
Mon: 08:00 – 09:15
Session 260: IPRs, Appropriability and Innovation
Session 338: Making Strategy, Strategic Change and the Role of Sensemaking and Sensegiving
Mon: 09:30 – 10:30
Session 296: How Social Networks Create Competitive Advantage: The Microfoundations Reputation
Mon: 11:00 – 12:15
Session 213: What is In It For Us? How Sustainability Matters for Firm Strategy
Session 352: CEO Decision Making
Session 405: Multi-Sided Platform Strategies
Mon: 13:30 – 14:30
Session 4: Business Models in their Competitive Context
Session 5: Building Strategic States
Session 298: Using Networks to Shape Strategy
Session 299: Dealing with the Euro Area Economic Crisis: Strategic Adjustment in the Period of Turmoil
Session 300: Methodological and Conceptual Frontiers in the New World of Networks
Mon: 14:45 – 16:00
Session 368: Firm Scope and Industry Competition
Session 375: Changing External Environments: How do Multinationals Respond?
Mon: 16:30 – 17:45
Session 245: Human Capital Complementarities
Session 344: Paradoxical Tensions and Innovative Strategies
Tue: 08:00 – 09:15
Session 409: Increasing the Relevance of Strategy Research
Session 446: Empirical Studies and Case Studies of Business Models
Tue: 09:30 – 10:30
Session 297: Granularity of Profit
Tue: 11:00 – 12:15
Session 469: M&As and Innovation
Tue: 14:15 – 15:15
Session 301: Strategy Frameworks: In Quest of Relevance in a Turbulent World
Session 302: Directing Strategy: The Process Challenges of Formulating and Implementing Strategy in a World of Networks
Session 470: Governance Challenges in Globalized Networks
Session 473: Rethinking the Architecture of Global Corporations
Tue: 15:30 – 16:45
Session 208: Interactions, Recombination and Adaptation Processes
Session 346: Management and Strategy Practices Reconsidered
Tue: 17:15 – 18:30
Session 441: Funding Entrepreneurial Ventures: Sources and Successes

All Sessions in Track I...

Sun: 08:00 – 09:15
Session 278: Routines: Theoretical and Empirical Advancements and Avenues for Future Research
Sun: 09:30 – 10:45
Session 463: Big Data: Revolutionizing Innovation and Competition
Sun: 11:15 – 12:30
Session 464: Foundations Session: A conversation with Michael Tushman on Leadership, Innovation and Strategic Change
Sun: 15:45 – 17:00
Session 270: Innovation in MNCs and Global Networks
Session 275: Open Innovation: Outcomes and antecedents
Sun: 17:15 – 18:30
Session 605: Knowledge and Innovation IG Business Meeting
Mon: 08:00 – 09:15
Session 260: IPRs, Appropriability and Innovation
Session 274: Incumbents, Radical Innovations and Disruptive Technologies
Mon: 11:00 – 12:15
Session 276: Organizational Learning
Session 277: Learning From Others
Session 372: The Challenges of Global Operations: Managing R&D and Complexity
Session 423: Alliances and Innovation Performance
Mon: 14:45 – 16:00
Session 265: Learning, Search, Slack: The behavioral theory revisited
Session 269: Knowledge Flows: Transfer, sharing and replication
Mon: 16:30 – 17:45
Session 254: Conversations about Knowledge
Session 257: Spin offs, Venture Capital and Entrepreneurship
Tue: 08:00 – 09:15
Session 259: Institutionalizing Innovation: Norms, status and legitimacy issues
Session 273: From Internal Resources to Customer Needs
Session 383: Globalization of R&D: Implications for Learning and Innovation
Tue: 11:00 – 12:15
Session 267: The Role of Individuals in Innovation
Session 272: Research and Development: Antecedents and outcomes
Session 361: Creativity and Innovation
Session 469: M&As and Innovation
Tue: 15:30 – 16:45
Session 262: Networks of Innovators
Session 263: Innovation Models in Emerging Economies
Tue: 17:15 – 18:30
Session 255: Exploration and Exploitation
Session 256: Organizing for Open Innovation
Session 261: Practices and Processes for Innovation


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