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Is high-quality knowledge always beneficial? Knowledge overlap and innovation performance in technological mergers and acquisitions

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  • Han, John
  • Jo, Gil S.
  • Kang, Jina

Abstract

This research analyses the effects of the knowledge overlap between acquirer and target firms on the performance of technological mergers and acquisitions (M&As). Extending previous research that has focused on the quantitative characteristics of knowledge, this research introduces a framework capturing the effects of both the quantity and quality of knowledge in overlapped and nonoverlapped parts of the knowledge base on subsequent innovation performance. Analyzing a data set of 192 technological M&As of 162 high-technology firms from 2001 to 2009, the results show that a high quality of overlapped knowledge has a positive effect on subsequent innovation performance, while the effect is negative for nonoverlapped knowledge quality. In addition, this research investigates the influence of the knowledge quantity on subsequent innovation performance. The implication of this research is that the knowledge overlap in technological M&As is essential for acquiring high-quality knowledge from the target firm and for improving innovation performance.

Suggested Citation

  • Han, John & Jo, Gil S. & Kang, Jina, 2018. "Is high-quality knowledge always beneficial? Knowledge overlap and innovation performance in technological mergers and acquisitions," Journal of Management & Organization, Cambridge University Press, vol. 24(2), pages 258-278, March.
    • Handle: RePEc:cup:jomorg:v:24:y:2018:i:02:p:258-278_00
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    Cited by:

    1. Tianxu Jiang & Min Zhu, 2021. "The impact of innovation on companies’ cross-border mergers and acquisitions: evidence from China," Quality & Quantity: International Journal of Methodology, Springer, vol. 55(3), pages 969-991, June.
    2. Ye Jin Lee & Kwangsoo Shin & Eungdo Kim, 2019. "The Influence of a Firm’s Capability and Dyadic Relationship of the Knowledge Base on Ambidextrous Innovation in Biopharmaceutical M&As," Sustainability, MDPI, vol. 11(18), pages 1-17, September.
    3. Zhou, Jinwei & Luo, Qi, 2024. "Influence factor studies based on ensemble learning on the innovation performance of technology mergers and acquisitions," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 222(C), pages 67-89.
    4. He Soung Ahn, 2020. "Sustaining the Family Business through Open Innovation: The Role of Technological Acquisitions in Shareholder Value Creation," Sustainability, MDPI, vol. 12(18), pages 1-17, September.
    5. Kaufmann, Mattheo & Schiereck, Dirk, 2023. "Acquiring for innovation: Evidence from the U.S. technology industry," Journal of Economic Dynamics and Control, Elsevier, vol. 152(C).
    6. Yunjae Bae & Kyungsuk Lee & Taewoo Roh, 2020. "Acquirer’s Absorptive Capacity and Firm Performance: The Perspectives of Strategic Behavior and Knowledge Assets," Sustainability, MDPI, vol. 12(20), pages 1-28, October.

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