Firm Acquisitions, Resource Complementarity and the Access to Localized Knowledge

Christoph Grimpe, Katrin Hussinger, Wolfgang Sofka

Research output: Contribution to conferencePaperResearchpeer-review

Abstract

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
https://conference.druid.dk/Druid/?confId=59

Conference

ConferenceDRUID19 Conference
Number41
LocationCopenhagen Business School
CountryDenmark
CityFrederiksberg
Period19/06/201921/06/2019
Internet address

Keywords

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

Cite this

Grimpe, C., Hussinger, K., & Sofka, W. (2019). Firm Acquisitions, Resource Complementarity and the Access to Localized Knowledge. Paper presented at DRUID19 Conference, Frederiksberg, Denmark.
Grimpe, Christoph ; Hussinger, Katrin ; Sofka, Wolfgang. / Firm Acquisitions, Resource Complementarity and the Access to Localized Knowledge. Paper presented at DRUID19 Conference, Frederiksberg, Denmark.31 p.
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Grimpe, C, Hussinger, K & Sofka, W 2019, 'Firm Acquisitions, Resource Complementarity and the Access to Localized Knowledge' Paper presented at, Frederiksberg, Denmark, 19/06/2019 - 21/06/2019, .

Firm Acquisitions, Resource Complementarity and the Access to Localized Knowledge. / Grimpe, Christoph; Hussinger, Katrin; Sofka, Wolfgang.

2019. Paper presented at DRUID19 Conference, Frederiksberg, Denmark.

Research output: Contribution to conferencePaperResearchpeer-review

TY - CONF

T1 - Firm Acquisitions, Resource Complementarity and the Access to Localized Knowledge

AU - Grimpe, Christoph

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AU - Sofka, Wolfgang

PY - 2019

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N2 - 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.

AB - 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.

KW - Firm acquisitions

KW - Localized knowledge

KW - Patents

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KW - Strategic factor market theory

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KW - Localized knowledge

KW - Patents

KW - Resource complementarity

KW - Strategic factor market theory

M3 - Paper

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Grimpe C, Hussinger K, Sofka W. Firm Acquisitions, Resource Complementarity and the Access to Localized Knowledge. 2019. Paper presented at DRUID19 Conference, Frederiksberg, Denmark.