Format of Original
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, Michael; King, David R.; and Covin, Jeffrey, "R&D Investment Level and Environment as Predictors of Firm Acquisition" (2006). Management Faculty Research and Publications. 24.