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Inventor CEO and technology M&A

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  • Lin, Nan
  • Li, Ao
  • Chen, Han
  • Chen, Wenchuan

Abstract

This study examines the effect of inventor CEO on firm's technology acquisition and finds robust evidence that CEOs with hands-on innovation experience are associated with more technology acquisition. We utilize plausibly exogenous CEO turnovers to address the causal effects of inventor CEOs on corporate financial strategy such as acquisition. The effect is more pronounced in firms which CEOs have stronger power or previous acquisition experience, firms with high ownership concentration or non-state-owned firms, firms in high-tech industry or with high product market competition. Our study further shows that inventor CEOs prefer cash payment in technology acquisition and achieve higher premiums. The acquirer's future innovation output has been significantly improved after acquisition. Overall, this study contributes to the emerging literature on executives's personal unique characteristics on corporate mergers and acquisitions.

Suggested Citation

  • Lin, Nan & Li, Ao & Chen, Han & Chen, Wenchuan, 2023. "Inventor CEO and technology M&A," International Review of Economics & Finance, Elsevier, vol. 88(C), pages 683-697.
    • Handle: RePEc:eee:reveco:v:88:y:2023:i:c:p:683-697
    DOI: 10.1016/j.iref.2023.06.032
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    References listed on IDEAS

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    1. Marianne Bertrand & Antoinette Schoar, 2003. "Managing with Style: The Effect of Managers on Firm Policies," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(4), pages 1169-1208.
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    Cited by:

    1. Wu, Guoyuan & Peng, Dongbo & Boriboonsomsin, Kanok, 2024. "Developing an Efficient Dispatching Strategy to Support Commercial Fleet Electrification," Institute of Transportation Studies, Working Paper Series qt2qz0n2gv, Institute of Transportation Studies, UC Davis.
    2. Zhong, Shihu & Guo, Fanyong & Zhang, Gexing & Fan, Youqing, 2024. "Role of potential power: The effect of part-time board secretary on merger decisions," International Review of Economics & Finance, Elsevier, vol. 93(PB), pages 285-298.
    3. Zhao, Yiran & Cai, Jianfeng, 2024. "Effects of M&A Type on Top Management Turnover: Moderating Role of Industry Similarity & Target Experience," International Review of Economics & Finance, Elsevier, vol. 93(PB), pages 1130-1144.
    4. Liao, Zhongju & Xu, Lijun & Zhang, Mengnan, 2024. "Government green procurement, technology mergers and acquisitions, and semiconductor firms’ environmental innovation: The moderating effect of executive compensation incentives," International Journal of Production Economics, Elsevier, vol. 273(C).

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