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Journal of Management Studies


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.


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.