Do Mergers and Acquisitions Promote R&D? The Case of European Innovation and Technology sector

  • Elena Rogova
  • Marina Kirichenko
  • Daria Lebedeva


Innovation efforts and R&D play a foundational role for companies seeking to further develop their products and services and secure a sufficient market share. This is especially relevant for knowledge-intensive fields, particularly for the Innovation and Technology Sector, where players are constantly challenged with adapting to its multi-faceted nature, processing large amounts of data, and rapid innovation transfer. Thus, it is important to study the factors that contribute to R&D intensity and encourage innovations in detail. The study explores the impact of M&A activity on R&D intensity and R&D spending increase of both the acquiring companies and their targets in European Union. The final sample consists of 85 companies that had implemented M&A deals in the Innovation and Technology sector of the EU between 2007 and 2021, acting as acquirers or targets in these deals. The data is collected from Refinitiv Eikon database. Subgroups are determined based on categorization established by the European Commission. These include Business support service activities, Computer programming, Data processing, Manufacturing, and Telecommunications. In addition, financial data was collected on non-merging companies for forming a control group for the analysis. Difference-in-difference and probit model estimation methods are used to analyze the effect of M&A activity on the companies involved. The results show that the R&D intensity
of both acquirers and targets decreases in the post-merger period. As for R&D expenditures, they increase for acquiring companies, while the effect is the opposite for their targets. The study contributes to the literature as it, unlike other similar studies that focus mostly on one group of actors, differentiates between the effect on the innovation activity of targets and the effect on the acquirers. The results could be used to increase the knowledge of the M&A effect on innovation efforts in the Innovation and Technology sector in European countries and understanding the possible problems it could lead to.


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Как цитировать
RogovaE., KirichenkoM. и LebedevaD. (2023) «Do Mergers and Acquisitions Promote R&D? The Case of European Innovation and Technology sector», Journal of Corporate Finance Research / Корпоративные Финансы | ISSN: 2073-0438, 17(4), сс. 5-18. doi: 10.17323/j.jcfr.2073-0438.17.4.2023.5-18.
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