Collaboration and innovation: a review of the effects of mergers, acquisitions and alliances on innovation

Collaboration and innovation: a review of the effects of mergers, acquisitions and alliances on innovation

Collaboration and innovation: a review of the effects of mergers, acquisitions and alliances on innovation

de Man A.-P. and Duysters G. Technovation, December 2005, Vol. 25 No. 12, Start Page: 1377, No. of pages: 11

Purpose – To review the effects of merger and acquisition (M&A) and strategic alliance (SA) on innovation. Design/methodology/approach – Regards SAs as co-operative agreements between parties while remaining separate whereas they become one entity under M&A. Remarks on the rise of both strategies since the 1970s. Reviews large-scale empirical M&A studies having an element of innovation success (15) and SA studies reporting technology position and economic performance effects (29). Covers success measures, time horizon, geographical setting, and sectoral background. Findings – Concludes, inter alia, that M&As: have a neutral or negative effect on innovation; may lead to lower innovation costs; and, well managed M&As outperform poorly managed. Finds SAs increase firms’ innovativeness under similar backgrounds, high alliance capability, and intense relationships – and that public organization involvement does not increase innovation (but may lower costs). Research limitations/implications – Declares research is needed into SA typology, networks and sectoral aspects while M&A requires investigation of effects of size and national/sectoral differences. Practical implications – States firms should: favor SAs over M&As for innovation (unless seeking R&D cost savings); choose partners with a similar knowledge base; and build SA management capability. Says governments should: recognize the limited impact of government-sponsored R&D consortia and not expect public institution involvement to increase firms’ innovativeness; allow SAs in most cases; and, may need to be industry specific. Originality/value – Presents finding into innovation impact of mergers and acquisitions and strategic alliances. Identifies areas for further exploration, and makes management and policy recommendations.ISSN: 0166-4972Reference: 34AZ273

Keywords: Innovation, Management development, Mergers and acquisitions, Organizational change, Organizational development, Public policy, R&D, Sociotechnical theory, Strategic alliances, Strategic choices