Department of Economics and Business Economics

The effect of acquisitions on exploration and exploitation in China

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaperJournal articleResearchpeer-review

Purpose: The mechanisms of knowledge acquisition and their impact on innovation are particularly relevant in the context of rapidly growing emerging markets. The purpose of this paper is to investigate the relationship between firm acquisition characteristics and post-acquisition knowledge exploration and exploitation in the Chinese domestic acquisition market. Design/methodology/approach: By using patent and company data of 188 domestic Chinese deals completed between 2002 and 2013, the paper replicates the measurements and analytical methods of the US-based study by Phene, Tallman and Almeida (2012) to address the acquirer’s opportunity to explore and/or exploit external knowledge, its ability to absorb and effectively assimilate such knowledge and thus establish innovations in new technologies. Findings: The paper finds support for a positive effect of knowledge uniqueness of the target on the bidder’s post-acquisition exploration. The findings also support that the post-acquisition exploitation is facilitated by the commonality of technological knowledge between the bidder and the target, a result that, although expected, was not be supported in the US-based study. Originality/value: This paper qualifies the generalizability of US-based findings about post-acquisition exploration and exploitation in the context of China. It also responds to the call for China-focused knowledge management research by capturing innovation capability building by Chinese firms through domestic acquisitions. Finally, it contributes to the nascent literature on replication in management studies.

Original languageEnglish
JournalJournal of Strategy and Management
Volume12
Issue2
Pages (from-to)174-188
Number of pages15
ISSN1755-425X
DOIs
Publication statusPublished - May 2019

    Research areas

  • Emerging market strategies, Exploration/exploitation, Mergers and acquisitions, Replication, exploitation, PERFORMANCE, KNOWLEDGE, Exploration, FIRMS, M-AND-A, OWNERSHIP

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