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Novelty Score and Technological Relatedness Measurement Using Patent Information in Mergers and Acquisitions: Case Study in the Japanese Electric Motor Industry

Author

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  • Katsuyuki Kaneko

    (Tokyo Institute of Technology)

  • Yuya Kajikawa

    (Tokyo Institute of Technology)

Abstract

Technological mergers and acquisitions (M&A) have been major strategic options for firm growth. However, it is not a rudimentary task to build a long list of target firms among a vast number of candidates. Technological relatedness measurement based on patent information is expected to support such a task. Although different measurement indicators have been proposed, there is still room to explore their functionality in regards to M&A. Therefore, we aim to quantify the technological relatedness between acquirers and acquired firms by investigating the cases in the Japanese electric motor industry. Our results showed that the common-IPC mode can efficiently eliminate the effects of irrelevant elements and effectively focus on the novelty level of the technologies in M&A. The measure is expected to help extract potential acquired firms for acquiring firms, construct exit strategies for startups, and monitor the dynamic capability of the focal firm.

Suggested Citation

  • Katsuyuki Kaneko & Yuya Kajikawa, 2023. "Novelty Score and Technological Relatedness Measurement Using Patent Information in Mergers and Acquisitions: Case Study in the Japanese Electric Motor Industry," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 24(2), pages 163-177, June.
    • Handle: RePEc:spr:gjofsm:v:24:y:2023:i:2:d:10.1007_s40171-022-00330-z
    DOI: 10.1007/s40171-022-00330-z
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    More about this item

    Keywords

    Electric motor industry; M&A; Patent classification; Startup; Technological distance; Technological relatedness;
    All these keywords.

    JEL classification:

    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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