Learning-by-Being-Acquired: Post-acquisition R&D Team Reorganization and Knowledge Transfer

In horizontal acquisitions, the post-acquisition integration of the R&D function often damages the inventive labor force and results in lower innovative productivity of acquired inventors. In this paper we study post-acquisition integration in terms of R&D team reorganization-i.e., the creation of new teams with both inventors of the acquiring and acquired firms-and assess the impact of this integration action in the period that immediately follows the acquisition. Drawing on social identity and self-categorization theories, we argue that R&D team reorganization increases the acquired inventors’ use of the prior stock of technological knowledge of the acquiring firm after the acquisition. Furthermore, this effect is enhanced if the focal acquired inventor has high relative innovation ability but is weakened for acquired inventors with high ingroup collaborative strength. We construct a sample of 3,625 acquired inventors implementing the coarsened exact matching technique and empirically test our arguments applying a difference-in-differences setup in a longitudinal data setting. We find general support for the hypothesized relationships. This study shows that the social identity perspective helps complementing predictions from the coordination-autonomy perspective.