||Judgement from the Sideline: Investors’ Perceptions of M&A Value Creation in High-Tech Industries
||Institute of International Business
Most of prior research on technological mergers and acquisitions (M&As) emphasized numbers and citations of patents as indicators for an acquirer’s innovation performance after the acquisition. Different from previous focus, this study argues that market value actually can better help managers evaluate post-acquisition outcomes. Specifically, this study sheds light on high-technology M&As and investigates investor’s reactions to the announcement of M&As. Empirical tests on 378 M&As undertaken during 2007-2015 in the high-technology industries find that business relatedness contributes to higher market value, and larger firm size of the target relevant to the acquirer affects market value positively right after acquisition announcement but negatively over a longer time period. This finding that the effects of firm size change over time suggests that acquirers should be cautious about whether they are capable of managing larger targets. However, previous cooperative experiences and the acquisition of older targets do not have signiﬁcant influences on market value across different observation windows, indicating that these two factors do not give investors either positive or negative signals.
Overall, this study examines an important means of post-acquisition performance evaluation, i.e., market value, in the context of technological acquisitions, and provides the insights into those factors influential to investors’ perceptions. Therefore, managers ought to be aware of investors’ perspectives when assessing acquisition outcomes.
Chapter 1 INTRODUCTION.....1
Chapter 2 LITERATURE REVIEW.....5
2.1 Patents to Assess Innovation Performances.....5
2.2 Investors’ Perceptions of Market Value.....8
Chapter 3 THEORY AND HYPOTHESES.....11
3.1 Business Relatedness.....11
3.2 Cooperative Experiences.....13
3.3 Relative Firm Age.....15
3.4 Relative Firm Size.....17
Chapter 4 METHODOLOGY.....19
4.1 Sample and Data Collection.....19
4.2 Variable and Measures.....21
4.2.1 Dependent Variable.....21
4.2.2 Independent Variable.....22
4.2.3 Control Variable.....23
4.3 Statistical Technique.....25
Chapter 5 ANALYSES AND RESULTS.....27
5.1 Descriptive Statistics.....27
5.2 Results of Hypothesis Testing.....27
5.3 Robustness Check.....29
Chapter 6 DISCUSSION.....38
6.1 Theoretical Implications.....39
6.2 Managerial Implications.....41
6.3 Limitations and Future Research.....42
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