M&A, DIVERSIFICATION, AND PATENT ANALYSIS: MEASURING INNOVATION PERFORMANCE

Focusing on the context of mergers and acquisitions (M&A), the objective of this Ph.D. thesis is threefold. First, it aims at highlighting the importance of innovation on the firm’s growth and success; a special attention is given not only to the mere quantity of the invention process output but especially to its quality that is conceived in terms of an invention’s technological impact, originality of its synthesized knowledge streams, and generality of its applicability in the technological space. Second, it aims at deepening our knowledge on the key drivers of innovation performance with a particular emphasis on the salient role of the firm’s diversification of resources and the knowledge recombination capabilities. Third, by pointing out the shortfalls of the above-mentioned measures of innovation performance and innovation quality, it aims at building a multidimensional ex-ante measure able to capture in one indicator different and complementary aspects of a patented invention. This Ph.D. thesis includes three essays that lay at the intersection of innovation and M&A literature. The first chapter investigates the directionality of the relationship between the quantity and the quality of innovation after an M&A and questions how the acceleration of the inventive process output affects the multifaceted features of the inventive quality (i.e. Ahuja & Katila, 2001; De Man & Duysters, 2005; Cassiman et al., 2005 Cloodt, Hagedoorn, & Van Kranenburg, 2006; Valentini, 2012). Interestingly, the results show a negative relationship, shedding new light on the dynamics that may affect the post-acquisition innovation performance and contributes in this way to the innovation and M&A literature. The second study tries to go further by analyzing the underlying mechanism that can clarify whether the diversification of resources via M&A enhances or impoverishes the acquirer’s post-acquisition innovation performance and when acquirers can leverage this strategy. Using the lenses of the resource-based view and the dynamic capability view (i.e. Barney, 1991; Peteraf, 1993; Helfat, 1997; Teece, Pisano, & Shuen, 1997; Hoopes, Madsen, & Walker, 2003; Zollo & Winter, 2002; Teece, 2007) this study advances the innovation strategy literature by answering how the access to valuable external resources goes through a process in which the dynamic capabilities play an important role and showing the existence of complementarities between the acquisition of external resources and the acquirer’s knowledge recombination capabilities, that affect the innovation performance. The third study proposes a novel patent measure able to capture three dimensions of a patented invention: the technological diversity, the technological distance from patent antecedents, and the degree of novelty. This measure can help both researchers and practitioners as it can be used as an effective proxy for the assessment of the firm’s knowledge recombination capabilities, the detection of breakthrough inventions, as well as the identification of the firm’s technological search strategies. In so doing, it advances the technology and patent literature (i.e. Trajtenberg, Henderson, & Jaffe, 1997; Hall, Jaffe, & Trajtenberg, 2001; Verhoeven, Bakker, & Veugelers, 2016).