Name: Nguyễn Văn Đức

Class: VNP 25

SYNOPSIS V:

CORPORATE INNOVATIONS AND MERGERS AND ACQUISITIONS

Jan Bena and Kai Li∗

1. What are the paper research questions?

 How are firms’ innovation activities related to transaction incidence?
 Do merger participants possess related technologies prior to the transaction?
 Does the presence of premerger technological overlap affect postmerger innovation
output?
2. What are the paper research gaps?

These authors acknowledge that there might still be omitted time-varying variables that
affect deals in the treatment and control samples differently; in such a case, the
coefficient estimates in equation of
P atent Index ijt =α + β 1 After ijt + β 2 Afterijt +Treat ij + DealFEij +YearFE t + eijt . would be
inconsistent.

3. Research methodology
a. Empirical Model?

E vent Firmℑ ,t =α + β1 Event Firm Innovation Characteristics ℑ ,t −1+ β 2 Event FirmCharacteristics ℑ ,t −1+ DealFE


A cquirer−Target ijm ,t =α + β 1 Technological Overlapijm ,t −1+ β 2 Acquirer Innovation Characteristics ℑ, t−1 + β 3 Tar

 P atent Index ijt =α + β 1 After ij t + β 2 After ijt +Treat ij + DealFE ij + YearFEt +e ijt .


Patent Index ijt =α + β 1 After ijt + β 2 After ijt + Treat ij + β 3 Any TechOverlapij + Afterijt + β 4 Any Tech Overlap ij + After
b. Key variables measurement?
+ Patent index
+ Citation weighted patents
+ R&D Self-cites ratio
+ Age of patent portfolio
+ Technological proximity
 + Knowledge base overlap
+ Acquirer’s (Target’s) Base Overlap Ratio
c. Empirical results and discussion?
+ Uncover a specific source of synergy—corporate innovation activity— that drives
acquisitions and has a positive impact on merger outcomes.
+ Firms with large patent portfolios and low R&D expenses are more likely to be
acquirers, while R&D-intensive firms with slow growth in patent output are more likely
to be acquired
+ Technological overlap between firms’ innovation activities has a positive and
significant effect on the likelihood of a merger pair formation
+ The positive effect of technological overlap on the likelihood of a merger pair
formation is reduced for firm pairs that also overlap in product markets.
+ A positive treatment effect of amerger on postmerger innovation output when there is
premerger technological overlap between merging firms.
+ Synergies obtained from combining innovation capabilities are an important impetus
for corporate acquisitions.
4. How do you develop the argument?
 Future research can focus on studying whether and how synergistic gains in areas other
than product markets and technological innovations are created through M&As.
 Exploring whether and how governance mechanisms in acquirer and target firms
facilitate the realization of synergistic gains will be important.