Building an innovation base exploring the role of

Authors: Saurabh Mishra Rebecca J Slotegraaf

Publish Date: 2013/02/01

Volume: 41, Issue: 6, Pages: 705-721

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Abstract

Innovation serves as a foundation for sustainable competitive advantage Therefore it is no surprise that firms seek to build an innovation base—a reservoir of inventions ideas and discoveries that serve as a platform for their innovation efforts One approach for building an innovation base is acquisitions though extant research reveals an equivocal verdict on whether acquisitions influence postacquisition inventions In this research the authors focus on type of acquisition acquisition behavior over time and invention characteristics to investigate how acquisition behavior influences postacquisition inventions Analysis of 352 firms across five industries and 17 years reveals that firms who make acquisitions produce a stronger innovation base than those who make no acquisitions Moreover comparing effects across vertical and horizontal acquisitions results indicate that the acquiring firm’s knowledge breadth plays an important role in determining which type of acquisition behavior generates the strongest influence on a firm’s innovation baseThe authors appreciate the valuable comments from Frank Acito Jonlee Andrews Aric Rindfleisch and Demetrios Vakratsas on prior versions of this manuscript In addition the authors appreciate the financial support of the Social Sciences and Humanities Research Council of Canada SSHRC awarded to the first author and of Whirlpool Corporation awarded to the second author The authors also thank Ayushman Dutta Julia Hoenig Ferguson Sowmya Gogineni Rahul Gupta Kelly Roses Caroline Roux James Sturgeon Judy Xian and Jason Yau for their valuable research support

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