Skip to main content Accessibility help

Is high-quality knowledge always beneficial? Knowledge overlap and innovation performance in technological mergers and acquisitions

  • John Han (a1), Gil S. Jo (a1) and Jina Kang (a2)


This research analyses the effects of the knowledge overlap between acquirer and target firms on the performance of technological mergers and acquisitions (M&As). Extending previous research that has focused on the quantitative characteristics of knowledge, this research introduces a framework capturing the effects of both the quantity and quality of knowledge in overlapped and nonoverlapped parts of the knowledge base on subsequent innovation performance. Analyzing a data set of 192 technological M&As of 162 high-technology firms from 2001 to 2009, the results show that a high quality of overlapped knowledge has a positive effect on subsequent innovation performance, while the effect is negative for nonoverlapped knowledge quality. In addition, this research investigates the influence of the knowledge quantity on subsequent innovation performance. The implication of this research is that the knowledge overlap in technological M&As is essential for acquiring high-quality knowledge from the target firm and for improving innovation performance.

  • View HTML
    • Send article to Kindle

      To send this article to your Kindle, first ensure is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about sending to your Kindle. Find out more about sending to your Kindle.

      Note you can select to send to either the or variations. ‘’ emails are free but can only be sent to your device when it is connected to wi-fi. ‘’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

      Find out more about the Kindle Personal Document Service.

      Is high-quality knowledge always beneficial? Knowledge overlap and innovation performance in technological mergers and acquisitions
      Available formats

      Send article to Dropbox

      To send this article to your Dropbox account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your <service> account. Find out more about sending content to Dropbox.

      Is high-quality knowledge always beneficial? Knowledge overlap and innovation performance in technological mergers and acquisitions
      Available formats

      Send article to Google Drive

      To send this article to your Google Drive account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your <service> account. Find out more about sending content to Google Drive.

      Is high-quality knowledge always beneficial? Knowledge overlap and innovation performance in technological mergers and acquisitions
      Available formats


Corresponding author

Corresponding author:


Hide All
Ahuja, G. (2000). Collaboration networks, structural holes, and innovation: A longitudinal study. Administrative Science Quarterly, 45(3), 425455.
Ahuja, G., & Katila, R. (2001). Technological acquisitions and the innovation performance of acquiring firms: A longitudinal study. Strategic Management Journal, 22(3), 197220.
Ahuja, G., & Lampert, C. M. (2001). Entrepreneurship in the large corporation: A longitudinal study of how established firms create breakthrough inventions. Strategic Management Journal, 22(6–7), 521543.
Albert, M. B., Avery, D., Narin, F., & McAllister, P. (1991). Direct validation of citation counts as indicators of industrially important patents. Research Policy, 20(3), 251259.
Alexandridis, G., Mavrovitis, C. F., & Travlos, N. G. (2012). How have M&As changed? Evidence from the sixth merger wave. The European Journal of Finance, 18(8), 663688.
Almeida, P., & Kogut, B. (1999). Localization of knowledge and the mobility of engineers in regional networks. Management Science, 45(7), 905917.
Argote, L., & Ingram, P. (2000). Knowledge transfer: A basis for competitive advantage in firms. Organizational Behavior and Human Decision Processes, 82(1), 150169.
Argote, L., & Miron-Spektor, E. (2011). Organizational learning: From experience to knowledge. Organization Science, 22(5), 11231137.
Arundel, A., & Kabla, I. (1998). What percentage of innovations are patented? Empirical estimates for European firms. Research Policy, 27(2), 127141.
Bettis, R. A., & Mahajan, V. (1985). Risk/return performance of diversified firms. Management Science, 31(7), 785799.
Cantwell, J. (Ed.) (1994). Transnational corporations and innovatory activities. London: Routledge.
Capron, L., & Mitchell, W. (2004). Where firms change: Internal development versus external capability sourcing in the global telecommunications industry. European Management Review, 1(2), 157174.
Carayannopoulos, S., & Auster, E. R. (2010). External knowledge sourcing in biotechnology through acquisition versus alliance: A KBV approach. Research Policy, 39(2), 254267.
Cassiman, B., Colombo, M. G., Garrone, P., & Veugelers, R. (2005). The impact of M&A on the R&D process: An empirical analysis of the role of technological-and market-relatedness. Research Policy, 34(2), 195220.
Castro-Casal, C., Neira-Fontela, E., & Álvarez-Pérez, M. D. (2013). Human resources retention and knowledge transfer in mergers and acquisitions. Journal of Management & Organization, 19(2), 188209.
Chakrabarti, A., Hauschildt, J., & Süverkrüp, C. (1994). Does it pay to acquire technological firms? R&D Management, 24(1), 4756.
Chen, Y. S., & Chang, K. C. (2010). The relationship between a firm’s patent quality and its market value – The case of US pharmaceutical industry. Technological Forecasting and Social Change, 77(1), 2033.
Cho, H. J., & Pucik, V. (2005). Relationship between innovativeness, quality, growth, profitability, and market value. Strategic Management Journal, 26(6), 555575.
Cloodt, M., Hagedoorn, J., & Van Kranenburg, H. (2006). Mergers and acquisitions: Their effect on the innovative performance of companies in high-tech industries. Research Policy, 35(5), 642654.
Cohen, W. M., & Levinthal, D. A. (1990). Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly, 35(1), 128152.
Colombo, M. G., & Rabbiosi, L. (2014). Technological similarity, post-acquisition R&D reorganization, and innovation performance in horizontal acquisitions. Research Policy, 43(6), 10391054.
Diestre, L., & Rajagopalan, N. (2012). Are all ‘sharks’ dangerous? new biotechnology ventures and partner selection in R&D alliances. Strategic Management Journal, 33(10), 11151134.
Dosi, G., Pavitt, K., & Soete, L. (1990). The economics of technical change and international trade. Pisa: Laboratory of Economics and Management.
Frankort, H. T. (2016). When does knowledge acquisition in R&D alliances increase new product development? The moderating roles of technological relatedness and product-market competition. Research Policy, 45(1), 291302.
Graebner, M. E., Eisenhardt, K. M., & Roundy, P. T. (2010). Success and failure in technology acquisitions: Lessons for buyers and sellers. Academy of Management Perspectives, 24(3), 7392.
Grant, R. M. (1996). Toward a knowledge‐based theory of the firm. Strategic Management Journal, 17(S2), 109122.
Hagedoorn, J., & Duysters, G. (2002). The effect of mergers and acquisitions on the technological performance of companies in a high-tech environment. Technology Analysis & Strategic Management, 14(1), 6785.
Hagedoorn, J., & Schakenraad, J. (1994). The effect of strategic technology alliances on company performance. Strategic Management Journal, 15(4), 291309.
Hall, B. H., Jaffe, A., & Trajtenberg, M. (2005). Market value and patent citations. RAND Journal of Economics, 36(1), 1638.
Harrison, J. S., Hitt, M. A., Hoskisson, R. E., & Ireland, R. D. (2001). Resource complementarity in business combinations: Extending the logic to organizational alliances. Journal of Management, 27(6), 679690.
Hausman, J., Hall, B. H., & Griliches, Z. (1984). Econometric models for count data with an application to the Patents-R & D relationship. Econometrica, 52(4), 909938.
Jasimuddin, S. M., Klein, J. H., & Connell, C. (2005). The paradox of using tacit and explicit knowledge: Strategies to face dilemmas. Management Decision, 43(1), 102112.
Jiang, L., Tan, J., & Thursby, M. (2011). Incumbent firm invention in emerging fields: Evidence from the semiconductor industry. Strategic Management Journal, 32(1), 5575.
Jo, G. S., Park, G., & Kang, J. (2016). Unravelling the link between technological M&A and innovation performance using the concept of relative absorptive capacity. Asian Journal of Technology Innovation, 24(1), 5576.
Kang, K. H., Jo, G. S., & Kang, J. (2015). External technology acquisition: A double-edged sword. Asian Journal of Technology Innovation, 23(1), 3552.
Kapoor, R., & Lim, K. (2007). The impact of acquisitions on the productivity of inventors at semiconductor firms: A synthesis of knowledge-based and incentive-based perspectives. Academy of Management Journal, 50(5), 11331155.
Karim, S., & Mitchell, W. (2000). Path-dependent and path-breaking change: Reconfiguring business resources following acquisitions in the US medical sector, 1978-1995. Strategic Management Journal, 21(10–11), 10611081.
Kim, C., Song, J., & Nerkar, A. (2012). Learning and innovation: Exploitation and exploration trade-offs. Journal of Business Research, 65(8), 11891194.
King, D. R., Slotegraaf, R. J., & Kesner, I. (2008). Performance implications of firm resource interactions in the acquisition of R&D-intensive firms. Organization Science, 19(2), 327340.
Kleinknecht, A., Van Montfort, K., & Brouwer, E. (2002). The non-trivial choice between innovation indicators. Economics of Innovation and New Technology, 11(2), 109121.
Kogut, B., & Zander, U. (1992). Knowledge of the firm, combinative capabilities, and the replication of technology. Organization Science, 3(3), 383397.
Kogut, B., & Zander, U. (1993). Knowledge of the firm and the evolutionary-theory of the multinational-corporation. Journal of International Business Studies, 24(4), 625645.
Koput, K. W. (1997). A chaotic model of innovative search: Some answers, many questions. Organization Science, 8(5), 528542.
Lane, P. J., & Lubatkin, M. (1998). Relative absorptive capacity and interorganizational learning. Strategic Management Journal, 19(5), 461477.
Larsson, R., & Finkelstein, S. (1999). Integrating strategic, organizational, and human resource perspectives on mergers and acquisitions: A case survey of synergy realization. Organization Science, 10(1), 126.
Lin, C., Wu, Y. J., Chang, C., Wang, W., & Lee, C. Y. (2012). The alliance innovation performance of R&D alliances – The absorptive capacity perspective. Technovation, 32(5), 282292.
Makri, M., Hitt, M. A., & Lane, P. J. (2010). Complementary technologies, knowledge relatedness, and invention outcomes in high technology mergers and acquisitions. Strategic Management Journal, 31(6), 602628.
Miozzo, M., DiVito, L., & Desyllas, P. (2015). When do acquirers invest in the R&D assets of acquired science-based firms in cross-border acquisitions? The role of technology and capabilities similarity and complementarity. Long Range Planning, 49(2), 221240.
Mowery, D. C., Oxley, J. E., & Silverman, B. S. (1996). Strategic alliances and interfirm knowledge transfer. Strategic Management Journal, 17(S2), 7791.
Mowery, D. C., Oxley, J. E., & Silverman, B. S. (1998). Technological overlap and interfirm cooperation: Implications for the resource-based view of the firm. Research Policy, 27(5), 507523.
Myers, R. H. (1990). Classical and modern regression with applications (Vol. 2), The Duxbury Advanced Series in Statistics and Decision Sciences. Belmont, CA: Duxbury Press.
Nonaka, I., & Takeuchi, H. (1996). A theory of organizational knowledge creation. International Journal of Technology Management, 11(7–8), 833845.
Nonaka, I., & Toyama, R. (2002). A firm as a dialectical being: towards a dynamic theory of a firm. Industrial and Corporate Change, 11(5), 9951009.
Orsi, L., Ganzaroli, A., De Noni, I., & Marelli, F. (2015). Knowledge utilisation drivers in technological M&As. Technology Analysis & Strategic Management, 27(8), 877894.
Oguz, F., & Sengün, A. E. (2011). Mystery of the unknown: Revisiting tacit knowledge in the organizational literature. Journal of Knowledge Management, 15(3), 445461.
Park, G., Shin, J., & Park, Y. (2006). Measurement of depreciation rate of technological knowledge: Technology cycle time approach. Journal of Scientific and Industrial Research, 65(2), 121127.
Pavitt, K. (1985). Patent statistics as indicators of innovative activities: Possibilities and problems. Scientometrics, 7(1–2), 7799.
Phene, A., & Almeida, P. (2008). Innovation in multinational subsidiaries: The role of knowledge assimilation and subsidiary capabilities. Journal of International Business Studies, 39(5), 901919.
Phene, A., Fladmoe-Lindquist, K., & Marsh, L. (2006). Breakthrough innovations in the US biotechnology industry: The effects of technological space and geographic origin. Strategic Management Journal, 27(4), 369388.
Phene, A., Tallman, S., & Almeida, P. (2012). When do acquisitions facilitate technological exploration and exploitation? Journal of Management, 38(3), 753783.
Puranam, P., & Srikanth, K. (2007). What they know vs. what they do: How acquirers leverage technology acquisitions. Strategic Management Journal, 28(8), 805825.
Rosenkopf, L., & Nerkar, A. (2001). Beyond local search: Boundary-spanning, exploration, and impact in the optical disk industry. Strategic Management Journal, 22(4), 287306.
Rothaermel, F. T., & Alexandre, M. T. (2009). Ambidexterity in technology sourcing: The moderating role of absorptive capacity. Organization Science, 20(4), 759780.
Rothaermel, F. T., & Hess, A. M. (2007). Building dynamic capabilities: Innovation driven by individual-, firm-, and network-level effects. Organization Science, 18(6), 898921.
Sampson, R. C. (2007). R&D alliances and firm performance: The impact of technological diversity and alliance organization on innovation. Academy of Management Journal, 50(2), 364386.
Sears, J., & Hoetker, G. (2014). Technological overlap, technological capabilities, and resource recombination in technological acquisitions. Strategic Management Journal, 35(1), 4867.
Sleuwaegen, L., & Valentini, G. (2006). Trends in mergers and acquisitions. In B. Cassiman & M. G. Colombo (Eds.), Merger and acquisitions – the innovation impact. Cheltenham: Edward Elgar publishing.
Song, J., Almeida, P., & Wu, G. (2003). Learning-by-hiring: When is mobility more likely to facilitate interfirm knowledge transfer? Management Science, 49(4), 351365.
Song, J., & Shin, J. (2008). The paradox of technological capabilities: A study of knowledge sourcing from host countries of overseas R&D operations. Journal of International Business Studies, 39(2), 291303.
Spender, J.-C. (1989). Industry recipes: An inquiry into the nature and sources of managerial judgement. Cambridge, MA: Basil-Blackwood.
Trajtenberg, M. (1990). A penny for your quotes: Patent citations and the value of innovations. The RAND Journal of Economics, 21(1), 172187.
Trajtenberg, M., Henderson, R., & Jaffe, A. (1997). University versus corporate patents: A window on the basicness of invention. Economics of Innovation and New Technology, 5(1), 1950.
Tsai, W. (2001). Knowledge transfer in intraorganizational networks: Effects of network position and absorptive capacity on business unit innovation and performance. Academy of Management Journal, 44(5), 9961004.
Uygur, U. (2013). Determinants of causal ambiguity and difficulty of knowledge transfer within the firm. Journal of Management & Organization, 19(6), 742755.
Valentini, G. (2012). Measuring the effect of M&A on patenting quantity and quality. Strategic Management Journal, 33(3), 336346.
Van de Vrande, V., Vanhaverbeke, W., & Duysters, G. (2009). External technology sourcing: The effect of uncertainty on governance mode choice. Journal of Business Venturing, 24(1), 6280.
Yang, C. S., Wei, C. P., & Chiang, Y. H. (2014). Exploiting technological indicators for effective technology merger and acquisition (M&A) predictions. Decision Sciences, 45(1), 147174.
Yoo, D. K. (2014). Substructures of perceived knowledge quality and interactions with knowledge sharing and innovativeness: A sensemaking perspective. Journal of Knowledge Management, 18(3), 523537.
Yoon, W., Lee, D. Y., & Song, J. (2015). Alliance network size, partner diversity, and knowledge creation in small biotech firms. Journal of Management & Organization, 21(5), 614626.
Yayavaram, S., & Chen, W. R. (2015). Changes in firm knowledge couplings and firm innovation performance: The moderating role of technological complexity. Strategic Management Journal, 36(3), 377396.



Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed