Impact of M&A by foreign companies on innovation activities of acquired companies (Japanese)

In recent years, the number of acquisitions of Japanese companies by foreign companies has been increasing. In addition, M&As for technology acquisition are becoming more important, especially in industries such as automobiles and semiconductors, where radical technological changes such as elect...

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Bibliographic Details
Published inIDEAS Working Paper Series from RePEc
Main Authors SUZUKI, Shinya, INUI Tomohiko, IKEDA Yuya
Format Paper
LanguageEnglish
Published St. Louis Federal Reserve Bank of St. Louis 01.01.2021
Subjects
Research & development expenditures
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Summary:In recent years, the number of acquisitions of Japanese companies by foreign companies has been increasing. In addition, M&As for technology acquisition are becoming more important, especially in industries such as automobiles and semiconductors, where radical technological changes such as electrification and autonomous driving are occurring. There is a possibility that R&D activities and technological resources are reorganized within the corporate group after the implementation of international M&As. In this study, we examine how the R&D activities of Japanese companies acquired by foreign companies change using a panel dataset at the firm level. The results show that R&D expenditures of an acquired company tend to decrease after the acquisition by a foreign company. However, R&D expenditures do not decrease after the acquisition in industries such as transportation machinery and electronic machinery. Furthermore, the effects of an acquisition on R&D expenditures of the acquired company vary depending on the nationality of the acquiring company.