Effects Of M&As On Innovation Performance

Mergers and acquisitions (M&As) have been a significant firm strategy for many years. The pharmaceutical industry has experienced intermittent waves of M&As since the 1990s and recently appeared to be in yet another wave. The current wave is characterized by technology driven and M&As play a significant role in those big pharmaceutical companies' technological strategic deployment. Due to constant changes in the technological era, recent international financial crisis, Chinese economy development growth rate slowing down and reform of the new medical system, whether Chinese pharmaceutical companies can sustain technology advantages becomes the most critical factor for business development and competition advantages. Given the growing importance of technology and innovation to firm competitiveness and the on-going importance of M&As, there need propose an expanded research agenda including the role of technology in driving mergers' decision, the impact of mergers on technology innovation. So, there need more researches about the effect of M&As or technology-driven M&As on acquirers' technological innovation performance, especially for Chinese high-tech companies.This paper studied the effect of M&As and technology-driven M&As on post-M&A technological innovation performance of acquiring firms in Chinese pharmaceutical industry. Taking 91 Chinese pharmaceutical companies as investigation object, built theory model"strategic motives-different types of acquisitions-technological performance"based on the logic mentality "motivation-conduation-performance" through literature study and interview, proposed the research hypothesizes and carried on an empirical study on the relations of these variables. This dissertation draws some conclusions as follows: (1) Chinese pharmaceutical companies M&As have a positive effects on technological innovation performance, the higher M&As frequencies, the higher technological innovation performance; (2) Technology-driven M&As have a positive effects on the acquiring firm's post-M&A innovative performance, while non-technological M&As have a non-significant effect on the post-M&A innovative performance of the acquiring firm; (3) There is a negative relationship between the relative size of the acquired knowledge base and the post-M&A innovative performance of the acquiring firm. The technological relatedness of the acquired knowledge base will be curvilinearly (inverse U-shaped) related to the post-M&A innovative performance of the acquiring firm.(4) The post-M&A innovative performance of the acquiring firm is more prominent while the acquiring firm' internal R&D efforts is stronger. In general, based on the development of technology-driven M&As, from the perspective of Chinese pharmaceutical companies, using the empirical analysis method to analyze the effect of M&As and technology-driven M&As on acquirers' technological innovation performance, as well as how the merging parties' knowledge base, technology relatedness and acquirers' internal R&D efforts effect the technological innovation performance in technology-driven M&As, so as to build the whole model of technology-driven M&As effects on technological innovation performance. The results of this paper are not only academic problems but also problems need to resolve in practice. The result make up for the deficiency of the related studies and has a positive contribution to M&As theory, technology-driven M&As theory, a well-connected network between M&As and technology innovation and other related academic theory. It also has important guiding significance to Chinese pharmaceutical companies' M&As and technological strategic deployment. In the end, some limitations of this research and important future directions for further research are pointed out.