Post M&A Innovation in Family Firms

Abdul Basit Issah*

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

Purpose The paper empirically investigates how family firms appropriate acquired resources to become more innovative in the context of merger waves. It draws on resource-based view and the theory of first mover (dis)advantages to examine the implications of the timing of acquisitions on innovation in family firms.Design/methodology/approachThe paper uses a panel data set of Standard & Poor's (S&P) 500 manufacturing firms followed over a period of 31 years. Findings The study finds empirical support for the predictions that family firms are more able to utilize acquired resources better than nonfamily firms. Furthermore, targets acquired during the upswing of a merger wave are more valuable to family firms and associated with more innovation than for nonfamily firms.Originality/valueThe paper establishes that resources acquired during the upswing of a merger wave are more valuable, provide better resource synergies and impact innovation positively in family firms than nonfamily firms. Second, the paper makes an empirical contribution that family firms absorb external resources markedly differently and more efficiently than nonfamily firms. Third, the paper enhances a better understanding of the influence of family ownership on the relationship between acquisitions and innovation outputs.
Original languageEnglish
JournalEuropean Journal of Innovation Management
Number of pages22
ISSN1460-1060
DOIs
Publication statusPublished - 10 Mar 2020

Keywords

  • Acquisitions
  • Family firms
  • Innovation
  • Merger waves
  • Resource-based view

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