R&D Activity and Acquisitions in High Technology Industries
Economic analysis of high-tech industries often assumes that firms┐ abilities to survive in such an industry depend on their own internal R&D efforts. High-tech firms may choose to specialize in either this internal growth (through R&D) strategy or an external growth strategy of acquiring other firms or firms┐ operations. They studied 200 electronics firms over 10 years to test the relationship between R&D intensity and the probability of acquisition. Robust to a variety of dependent variable specifications, they find a strong and significant negative correlation, suggesting that electronics firms may be specializing in one activity or the other. Firms with greater intangible assets, higher profitability and lower debt to asset ratios are more likely to acquire. Tables.
What people are saying - Write a review
We haven't found any reviews in the usual places.
ACQit acquisition decisions acquisition market acquisitions by firms cash flow coefficient on RDPER Corp correlation between R&D dependent variable descriptive statistics electrical equipment electronic and electrical empirical endogeneity concerns entrant Equipment is SIC explanatory variables firm-level firm-specific effects firm’s fiscal firms acquiring fixed effects free cash flow Gans and Stern GMM estimation procedure Hall’s high R&D intensity high technology sectors high-technology industries incumbent intensity and acquisition lagged regressor licensing Likelihood-ratio test manufacturing firms Mergers and Acquisitions negative binomial specification negative correlation number of acquisitions p-value paper percent point estimates Poisson positive correlation probit profitability R&D activity R&D and acquisition R&D expenditures R&D intensity range R&D process RDPERit relationship between R&D reports RETSALE sample firms sample of firms Seagate Sector’s share sensitivity tests substantial substitute Symantec Corporation synergy gains target firm total assets total U.S. Trajtenberg 1990 Tremblay and Tremblay U.S. domestic Vishay Wooldridge 1997