Market-Driven Technological Innovation Through Acquisitions: The Moderating Effect of Firm Size

Jongkuk Lee, Minyoung Kim

Research output: Contribution to journalArticlepeer-review

22 Scopus citations

Abstract

This study is an effort to reveal market-driven innovation via acquisitions. By differentiating the organizational process of resource integration pertaining to market- versus technology-driven innovation via acquisitions, we show that product market relatedness and technology relatedness have differential effects on postacquisition innovation performance, depending on the size of the acquirer. Our analysis of acquisitions in high-tech industries indicates that larger firms maximize their postacquisition technological innovation performance at a lower level of technology relatedness and, in contrast, at a higher level of product market relatedness, whereas the opposite is true for smaller firms. This study contributes to the acquisitions research by identifying (a) market-driven innovation via acquisitions and (b) different mechanisms through which product market and technological resources affect postacquisition technological innovation.

Original languageEnglish
Pages (from-to)1934-1963
Number of pages30
JournalJournal of Management
Volume42
Issue number7
DOIs
StatePublished - 1 Nov 2016

Keywords

  • firm size
  • market-driven innovation
  • postacquisition technological innovation performance
  • product market relatedness
  • technology relatedness
  • technology-driven innovation

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