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Technology complexity and target selection: the case of US hospital mergers

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  • Núria Mas
  • Giovanni Valentini

Abstract

This article examines the role of technology in the selection of targets in a merger. Held technology should have a notable impact, especially in contexts in which specific know-how resides with experts as well as within organizational routines that are difficult to reproduce. By acquiring a target, firms obtain novel technologies, along with the knowledge and capabilities necessary to implement them. Such acquisitions become more relevant as the complexity of the technologies increases. With a focus on the US hospital market—in which technology is a relevant factor and complexity has been growing—the hypotheses tests use data from 222 mergers and acquisitions that took place between 1985 and 2000. The results confirm that technology is a fundamental driver of the US hospital consolidation process: hospitals prefer targets that hold a different set of technologies from their own, especially when those technologies are complex and involve some know-how that is difficult to replicate.

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  • Núria Mas & Giovanni Valentini, 2015. "Technology complexity and target selection: the case of US hospital mergers," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 24(2), pages 511-537.
    • Handle: RePEc:oup:indcch:v:24:y:2015:i:2:p:511-537.
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    File URL: http://hdl.handle.net/10.1093/icc/dtu017
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