Innovative performance of technological M&As: The moderating role of M&A experience on knowledge overlap and non-overlap between target and acquiring firms in the bio-pharmaceutical industry

Technological mergers and acquisitions (M&As), in which the underlying goal of acquiring firms is to acquire knowledge and information, have become increasingly prevalent in the bio-pharmaceutical industry. I analyse the effects of the overlapping and non-overlapping knowledge base between target and acquiring firms. More specifically, I consider the quality, as well as quantity, of the overlapping and non-overlapping knowledge, and investigate their effect on post-deal innovative performance of the acquiring firm. Further, I investigate the role of prior M&A experience as the moderative capacity of the acquiring firm and investigate its moderating effect on this relationship. The analyses use a data set of 122 technological M&As from 80 different acquiring firms in the bio-pharmaceutical industry. No statistically significant relationship between either the quantity or quality of (non-) overlapping knowledge and innovative performance was found, nor a significant direct or moderating effect of M&A experience. A discussion of the signs of the coefficients, regardless of a lack of significance, provide potential insights into the effects of the nature of knowledge between the acquiring and target firm.