Resource Complementarity and Value Capture in Firm Acquisitions: The Role of Intellectual Property Rights

Christoph Grimpe, Katrin Hussinger

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    Abstract

    Extant literature holds that firm acquisitions create value through innovation if the knowledge bases of the acquirer and the target complement each other. Little is known about the value that patents associated with a target's knowledge convey to the acquirer, i.e., their value in securing market exclusion and freedom to operate in R&D. We argue that such property rights hold preemptive power allowing firms to capture the value from combining complementary technologies and to realize gains from trade in strategic factor markets. Our results for a sample of 1,428 acquisitions indicate that—controlling for technological value—acquired preemptive power is an important determinant of the acquisition price, particularly when the acquirer is technology intensive and acquired patents are highly related to the acquirer's knowledge base.
    Original languageEnglish
    JournalStrategic Management Journal
    Volume35
    Issue number12
    Pages (from-to)1762–1780
    ISSN0143-2095
    DOIs
    Publication statusPublished - 2014

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