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R&D intensity and acquisition and divestiture of corporate assets: Evidence from Japan

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  • Ushijima, Tatsuo

Abstract

This article provides evidence from Japanese acquisitions and divestitures after the late 1990s on the effect of corporate R&D to stimulate inter-firm asset trade. Consistent with the notion that R&D increases a firm's opportunities for and ability to profit from synergy with external assets, regressions performed on a sample of publicly traded manufacturers reveal that R&D intensity and the breadth of patented technologies positively and significantly correlate with a firm's probabilities to acquire and sell off assets. The link of R&D and divestiture is qualitatively homogeneous across industries and time but the positive and significant R&D-acquisition link concentrates in industries where the interdependence of firms' innovative activities is relatively high and time when firms likely had large pent-up demand for asset trade.

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  • Ushijima, Tatsuo, 2009. "R&D intensity and acquisition and divestiture of corporate assets: Evidence from Japan," Journal of Economics and Business, Elsevier, vol. 61(5), pages 415-433, September.
    • Handle: RePEc:eee:jebusi:v:61:y::i:5:p:415-433
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