Document Type

Article

Publication Date

2006

Source Publication

Journal of Management Studies

Abstract

R&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.

Comments

Heeley, MB, King DR, & Covin, JG. 2006. R&D Investment Level and Environment as Predictors of Firm Acquisition. Journal of Management Studies, 43(7): 1513-1536.