Information Technology and Corporate Acquisitions

I lovingly dedicate this dissertation to my wife, Yanfang Duan, who accompanied me on this long, arduous journey and freed me from every concern; to my daughter, Caroline, who brought me enormous, invaluable happiness; and to my parents for their constant, unwavering support. v Acknowledgements This dissertation would not have been possible without help and support from many established scholars. I would like to first express my deep and sincere appreciation to my academic advisor, Dr. Hüseyin Tanriverdi. Dr. Tanriverdi opened the door to academia for me six years ago, and has been offering numerous advice, guidance, and support ever since. As his research and teaching apprentice, I have been so deeply influenced by his passion, self-discipline, and everlasting pursuit of academic truth in addition to his expertise in the field of strategic information technology management. I am also deeply indebted to my dissertation committee members: Drs. enormously encouraging and supportive comments when I need them most, and Dr. Jarvenpaa generously invested hundreds of hours discussing research with me in my last few years in the doctoral program. I am also greatly thankful for Dr. Rindova's seminar on strategic management that largely forms my view on strategy research at the very early stage of my academic life, and for Dr. McDaniel's many insights on healthcare management that later becomes the research context of this dissertation. It is such a great fortune for me to work with this group of world-class scholars. I am also grateful to all of those individuals and organizations that help me in this dissertation journey. HIMSS (Healthcare Information and Management Systems Society) generously shared with me its proprietary datasets on healthcare information technology; the university librarians helped me gain access to several other critical data sources; and my professors and fellow doctoral students help me in many different ways during my time at the University of Texas at Austin. Supervisor: Hüseyin Tanriverdi This dissertation examines how information technology can help acquirers to improve the performance of their acquisition targets. An acquisition creates value when the acquirer can generate more returns from the acquired business than its former owner can, a condition we call the acquirer's parenting advantage. Then, we introduce two IT-related sources of parenting advantage. Acquirers with more extensive process digitization can provide richer digitized resource to serve their newly acquired businesses, and acquirers with more related process digitization can unlock more synergies between the …