Mergers and Acquisitions of Innovative Companies in Developed and Emerging Capital Markets: What is Specific About Them?

Abstract

Currently, innovative companies are one of the key drivers of the global market for mergers and acquisitions, which makes it important to identify their specific features, as well as to study the effectiveness of such deals. However, in modern academic literature there is no definitive answer to the question of which company can be considered innovative, and how to determine its level of innovation. Also, there is no clear answer to the question of what an innovative M&A deal is, and what features it has. Extremely little attention is paid to cross-border innovative mergers and acquisitions transactions and the determination of their features. This paper provides a brief overview of the available literature on these topics. It describes how to define an innovative company and the main approaches to assess the effectiveness of innovative mergers and acquisitions deals. It also discusses international innovative mergers and acquisitions and their features. Based on the results of the literature review, it was concluded that in most of the works, innovation is determined through the absolute value of various indicators listed in this paper, or with the help of special questionnaires sent to the company’s management. Innovative companies can also be defined based on the industries in which companies are involved. The innovative performance after mergers and acquisitions is measured by a change in the absolute quantity or in the quantity of citations of existing company patents. It was not possible to establish a clear answer about the impact of mergers and acquisitions on the innovative performance of the company, since the research results demonstrate contradictory results. The main motive of cross-border innovation M&A deals is the acquisition of new technologies to gain competitive advantages. However, there is no unequivocal effect on the performance of this type of transactions.