Do Mergers of Potentially Dominant firms foster Innovation?

E. Cefis, A. Sabidussi, E.J.J. Schenk

Research output: Book/ReportReportAcademic

Abstract

We investigate the effects of M&A on innovation in the specific context of potential or realized market dominance. Authorities are challenged by balancing both detrimental and beneficial effects of mergers on innovation, especially when a merger threatens to result in market dominance, while firms would wish to uncover all the potential benefits arising from M&A. The effects of M&As on innovation have been tested on a panel dataset, constructed from the Dutch Community Innovation Survey and the Dutch Business Register, including around 1000 manufacturing companies. We have adopted a comprehensive approach, taking into consideration three dimensions of innovation: innovation inputs, innovation outputs and efficiency. The results show that M&As performed in the previous 3-5 years have a positive and significant effect on innovation except R&D expenses and innovation efficiencies. The results also suggest that technological regimes are critical to understanding the patterns of innovation.
Original languageEnglish
Place of PublicationUtrecht
PublisherTjalling C. Koopmans Research Institute, Utrecht University
Publication statusPublished - 2007

Publication series

NameDiscussion paper series
PublisherTjalling C. Koopmans Research Institute, Utrecht University
No.07-20

Keywords

  • economics
  • market economics
  • firms
  • businesses
  • mergers
  • acquisition
  • innovations
  • expenditure
  • netherlands

Fingerprint Dive into the research topics of 'Do Mergers of Potentially Dominant firms foster Innovation?'. Together they form a unique fingerprint.

Cite this