Investigating the Relationship Between Count of Acquisition and R&D Expenditure

Abstract

Acquisitions play an important role for firms to grow especially in technology industry but there remain some issues needed to be solved in this area Previous research considered acquisitions and internal R&D two approaches for a firm to develop new technologies or broaden markets Nevertheless extant studies have inconsistent arguments regarding whether acquisitions and internal R&D are substitute or complementary strategies Additionally prior studies emphasized the importance of innovation for acquisitions in high technology industry This paper suggests that by drawing on the idea of resources allocation there is a negative relationship between acquisitions and R&D activities Besides this relationship is moderated by financial performance and 3 types of acquisitions (horizontal vertical and conglomerate) Hypotheses were tested on a sample of 690 acquisitions in the U S high technology industry Empirical results show that financial performance will weaken the negative relationship between acquisitions and R&D expenditure On the contrary the increase of vertical and conglomerate integrations strengthen the negative relationship Since the moderators were developed from the resources allocation concept our findings confirm that resources allocation plays a critical role in the relationship between acquisitions and R&D activities

Date of Award	2017 Jul 24
Original language	English
Supervisor	Chiung-Hui Tseng (Supervisor)