Firm Acquisitions, Resource Complementarity and the Access to Localized Knowledge

Christoph Grimpe, Katrin Hussinger, Wolfgang Sofka

Research output: Contribution to conferencePaperResearchpeer-review


How do firms gain access to localized knowledge? In this research, we investigate firm acquisitions as a channel through which acquiring firms obtain exposure to knowledge spillovers in a target firm’s region. Based on a comprehensive dataset of 851 technology-oriented mergers and acquisitions in Europe from 2001 to 2010 combined with data on regional patent stocks, our results show that the price of a target firm paid by the acquirer increases not only with regard to the target’s knowledge base but also with the amount of knowledge localized in the target’s region. We show that localized knowledge is most valuable to the acquirer when it is closely related to the target’s knowledge base. Conversely, we do not find a significant effect of the relatedness between the acquirer’s knowledge base and the localized knowledge on the acquisition price. In that sense, target firms serve as a conduit for knowledge spillovers for the acquirer.
Original languageEnglish
Publication date2019
Number of pages31
Publication statusPublished - 2019
EventDRUID19 Conference - Copenhagen Business School, Frederiksberg, Denmark
Duration: 19 Jun 201921 Jun 2019
Conference number: 41


ConferenceDRUID19 Conference
LocationCopenhagen Business School
Internet address


  • Firm acquisitions
  • Localized knowledge
  • Patents
  • Resource complementarity
  • Strategic factor market theory

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