R&D Investment Level and Environment as Predictors of Firm AcquisitionJournal of Management Studies
Format of Original24 p.
AbstractR&D investments contribute to the development of firm technology resources, and the possession of such resources often increases a firm’s attractiveness as a potential acquisition target. However, the value ascribed to a firm’s technology resources by would-be acquirers may be moderated by its industry’s environmental characteristics. Using data from 2886 firms, we find that investments in R&D predict acquisition likelihood and that R&D investments are most strongly associated with acquisition of firms under conditions of high environmental munificence and dynamism. Theoretical and managerial implications are discussed.
Citation InformationMichael Heeley, David King and Jeffrey Covin. "R&D Investment Level and Environment as Predictors of Firm Acquisition" Journal of Management Studies (2006) ISSN: 0022-2380
Available at: http://works.bepress.com/david_king/12/