How does firm experience and institutional distance impact ownership choice in high-technology acquisitions?
Article first published online: 9 SEP 2013
© 2013 John Wiley & Sons Ltd and RADMA
Volume 43, Issue 5, pages 501–516, November 2013
How to Cite
Elango, B., Lahiri, S. and Kundu, S. K. (2013), How does firm experience and institutional distance impact ownership choice in high-technology acquisitions?. R&D Management, 43: 501–516. doi: 10.1111/radm.12032
- Issue published online: 22 OCT 2013
- Article first published online: 9 SEP 2013
One of the critical reasons for a firm to acquire other firms is to access new technology. This study seeks to understand what ownership position a firm should take in foreign markets if the target is in a high-technology industry. Specifically, it looks at how firm-level experience and institutional distance could impact this ownership. Using logistic regression models on a sample of 1,091 cross-border acquisitions undertaken by firms from 36 countries over an 8-year time period (2001–2008), we find that when firms acquire targets in a high-technology industry, they resort to partial acquisitions. Our analysis further suggests that when firms seek targets in high-technology industries but have experience with acquisitions or face higher institutional distance, the likelihood of full acquisitions over partial ones increases. Study findings contribute to our understanding of the interactive relationship among technology, experience, and institutional distance in determining appropriate ownership choices.