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Discussion Paper Series 1: Economic Studies, Deutsche Bundesbank >
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http://hdl.handle.net/10419/19674
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| Title: | | The role of technology in M&As: a firm-level comparison of cross-border and domestic deals  |
| Authors: | | Frey, Rainer Hussinger, Katrin |
| Issue Date: | | 2006 |
| Series/Report no.: | | Discussion paper Series 1 / Volkswirtschaftliches Forschungszentrum der Deutschen Bundesbank 2006,45 |
| Abstract: | | Technological change is often hypothesized as one of the main drivers of merger activities. This paper analyzes the role of technology in mergers and acquisitions (M&As) at the firm level. Based on a newly created data set that combines financial information and patent data for public limited companies in Europe as well as country level variables, we apply a structural model to investigate technology-related motivations behind merger formation. Distinguishing between cross-border and domestic M&As, we find that technological relatedness of the M&A partners reduces uncertainty and the expected risk of failure associated with cross-border acquisitions significantly, whereas there is no evidence for technological complementarities driving domestic M&As. The relevance of technology for crossborder M&As further illustrates the international character of technology markets. |
| Subjects: | | domestic versus cross-border M&As technological relatedness market relatedness |
| JEL: | | O32 O34 G34 C25 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Discussion Paper Series 1: Economic Studies, Deutsche Bundesbank
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