Wps-mgt-07-03 Complementary Technologies, Knowledge Relatedness and Innovation Outcomes in High Technology Mergers and Acquisitions

Building on research in organizational learning and technology management, this study develops and tests a knowledge-based model of acquirer-target relatedness and innovation performance in high technology mergers and acquisitions. Knowledge relatedness emphasizes both complementarity (supporting or facilitating knowledge bases) and similarity (overlapping knowledge bases). An examination of high-technology M&As provided support for theoretical arguments linking science and technology relatedness with post-merger innovation quantity and quality. Also, the interactions of technology complementarity with the product/market similarity between the acquiring and acquired firms and with acquirer diversification were found to affect innovation outcomes. The findings provide a richer understanding of the role of knowledge relatedness in post M&A innovation performance.