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The Effect Of Innovation Capabilities And Experience On Cross-Border Acquisition Performance

Author

Listed:
  • YonJin Suh
  • JaeJoon You
  • PhilSoo Kim

Abstract

Due to the integration of the European market, the globalization process, and the rising importance of technological innovation, there has been a surge in cross-border acquisition strategy for European firms. Innovative technology and experience are the main drivers behind firms’ acquisition imperatives to realize sound performance. Based on the resource-based view and organizational learning perspective, our empirical research focuses on the effects of European firms’ innovative capabilities and experience on their acquisition performance when targeting United States firms. The results indicate that both innovative capabilities and experience have a positive effect on acquisition performance. This suggests that in order to have successful acquisition performance, European firms need to reinforce their innovative capabilities and commit to accumulating experience in articulating cross-border acquisition strategy. In addition, we discuss the interaction effect that relatedness has on the acquisition performance of European firms. Our findings indicate that related acquisitions associated with redundant or similar innovative capabilities and acquisition experience hinder acquisition performance. We posit that relatedness has a negative moderating effect on acquisition performance.

Suggested Citation

  • YonJin Suh & JaeJoon You & PhilSoo Kim, 2013. "The Effect Of Innovation Capabilities And Experience On Cross-Border Acquisition Performance," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 7(3), pages 59-74.
    • Handle: RePEc:ibf:gjbres:v:7:y:2013:i:3:p:59-74
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    Citations

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    Cited by:

    1. Loughran, Tim & Vijh, Anand M, 1997. "Do Long-Term Shareholders Benefit from Corporate Acquisitions?," Journal of Finance, American Finance Association, vol. 52(5), pages 1765-1790, December.
    2. Lili Mi & Xiao-Guang Yue & Xue-Feng Shao & Yuanfei Kang & Yulong Liu, 2020. "Strategic Asset Seeking and Innovation Performance: The Role of Innovation Capabilities and Host Country Institutions," JRFM, MDPI, vol. 13(3), pages 1-22, March.
    3. Genc, Omer F. & Luo, Dan, 2024. "A different view on acquisition paradox: Empirical examination of international acquisitions from competitiveness perspective," Journal of Economics and Business, Elsevier, vol. 130(C).
    4. Aamir Khan & David Kalisz, 2024. "Post-Acquisition Operating Performance of Acquiring Firms following Cross-Border Mergers and Acquisitions," Economies, MDPI, vol. 12(7), pages 1-14, July.

    More about this item

    Keywords

    Resource-based view; organizational learning; cross-border acquisition; innovation capability; acquisition experience; relatedness.;
    All these keywords.

    JEL classification:

    • M16 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - International Business Administration

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