Acquisitions of start-ups by incumbent businesses A market selection process of "high-quality" entrants?
Author
Summary, in English
We analyze the frequency and nature by which new firms are acquired by established businesses. Acquisitions are often considered to reflect a technology transfer process and to also constitute one way in which a "symbiosis" between new technology-based firms (NTBFs) and established businesses is realized. Using a micro-level dataset for Sweden in which we follow new entrants up to 18 years after entry, we show that acquisitions of recent start-ups are rare and restricted to a small group of entrants with defining characteristics. Estimates from competing risks models show that acquired start-ups, in particular by multinational enterprises (MNEs), stand out from entrants that either remain independent or exit by being much more likely to be spin-offs operating in high-tech sectors, having strong technological competence, and having weak internal financial resources. Our overall findings support the argument that acquisitions primarily concern NTBFs in market contexts where entry costs are large, access to finance is important and incumbents have valuable complementary capabilities and resources. (C) 2015 Elsevier B.V. All rights reserved.
Department/s
Publishing year
2016
Language
English
Pages
272-290
Publication/Series
Research Policy
Volume
45
Issue
1
Document type
Journal article
Publisher
Elsevier
Topic
- Business Administration
Keywords
- Acquisitions
- Post-entry performance
- Market selection
- Start-ups
- New
- technology-based firms (NTBFs)
- Innovation
- Entrepreneurship systems
- Access to finance
Status
Published
ISBN/ISSN/Other
- ISSN: 0048-7333