What they know vs. what they do: how acquirers leverage technology acquisitions
Article first published online: 3 APR 2007
Copyright © 2007 John Wiley & Sons, Ltd.
Strategic Management Journal
Volume 28, Issue 8, pages 805–825, August 2007
How to Cite
Puranam, P. and Srikanth, K. (2007), What they know vs. what they do: how acquirers leverage technology acquisitions. Strat. Mgmt. J., 28: 805–825. doi: 10.1002/smj.608
- Issue published online: 14 JUN 2007
- Article first published online: 3 APR 2007
- Manuscript Revised: 11 SEP 2006
- Manuscript Received: 4 NOV 2004
- technology acquisitions;
- post-merger integration;
Existing research suggests that in acquisitions of small technology-based firms by large established firms post-merger integration both enables and hinders acquirers' efforts to leverage the technology of acquired firms. This apparent paradox can be resolved once we account for the qualitatively distinct ways in which acquirers leverage technology acquisitions. Integration helps acquirers use the acquired firm's existing knowledge as an input to their own innovation processes (leveraging what they know), but hinders their reliance on the acquired firm as an independent source of ongoing innovation (leveraging what they do). We also show that experienced acquirers are better able to mitigate the disruptive consequences of the loss of autonomy entailed by integration, though we find no evidence that they achieve greater coordination benefits from integration. Copyright © 2007 John Wiley & Sons, Ltd.