Technology sourcing acquisitions

Purpose – The purpose of this paper is to determine what the effects of acquisition are on R&D patterns.Design/methodology/approach – This paper tests whether the actual post‐acquisition R&D intensity of the combined firm deviated from the predicted R&D intensity, where the predicted amount is an asset‐weighted average of pre‐acquisition values.Findings – The results indicate that the combination of technology sourcing and technological relatedness have strong predictive powers for determining changes in post‐acquisition R&D intensity. Technology sourcing acquisition of unrelated technologies results in an increase in post‐acquisition R&D intensity, as predicted. Acquirers in this situation may be using their acquisition as a platform for research expansion.Research limitations/implications – The dataset used in this paper was restricted to public acquirers and targets for completeness of financial information. It would be useful to determine the extent to which a technology sourcing acquirer is predicted...