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Technological overlap, technological capabilities, and resource recombination in technological acquisitions

Authors

  • Joshua Sears,

    Corresponding author
    1. Department of Managerial Sciences, J. Mack Robinson College of Business, Georgia State University, Atlanta, Georgia, U.S.A.
    • Correspondence to: Joshua Sears, Department of Managerial Sciences, J. Mack Robinson College of Business, Georgia State University, 35 Broad Street NW, Suite 1029, Atlanta, GA 30303, U.S.A. E-mail: jsears6@gsu.edu

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  • Glenn Hoetker

    1. Department of Management, W.P. Carey School of Business, Arizona State University, Tempe, Arizona, U.S.A.
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Abstract

The performance of technological acquisitions depends heavily on the overlap between the knowledge bases of the target and acquirer. We argue that overlap is best viewed as two distinct constructs: target overlap, the proportion of the target's knowledge base that the acquirer already possesses, and acquirer overlap, the proportion of the acquirer's knowledge base duplicated by the target. Each affects the value created from the firms' technological capabilities differently due to absorptive capacity, knowledge redundancy, and organizational disruption. Further, the low quantity of innovations observed in acquisitions with low target overlap may conceal an offsetting increase in their novelty. Copyright © 2013 John Wiley & Sons, Ltd.

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