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Inter-Firm Inventor Collaboration and Path-Breaking Innovation: Evidence From Inventor Teams Post-Merger

Published online by Cambridge University Press:  29 April 2022

Kai Li Open the ORCID record for Kai Li [Opens in a new window]  and
Jin Wang
Kai Li*
Affiliation:
University of British Columbia Sauder School of Business
Jin Wang
Affiliation:
Wilfrid Laurier University Lazaridis School of Business and Economics jwang@wlu.ca
*
kai.li@sauder.ubc.ca (corresponding author)
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Abstract

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Using a large and novel data set over the period of 1976 to 2019 tracking inventors’ career paths following mergers and acquisitions, we show that collaboration between acquirer and target inventors post-merger is associated with more path-breaking patents than those filed by either acquirer or target inventor-only teams. We further show that such collaboration is more important in improving acquirers’ innovation capabilities than hiring target inventors and knowledge spillovers. Finally, we show that recombining tacit knowledge embodied in the human capital of acquirer and target inventors is likely the mechanism. We conclude that inter-firm inventor collaboration is one key means for achieving synergies.

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 58 , Issue 3 , May 2023 , pp. 1144 - 1171
Creative Commons
Creative Common License - CCCreative Common License - BY
This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (http://creativecommons.org/licenses/by/4.0), which permits unrestricted re-use, distribution and reproduction, provided the original article is properly cited.
Copyright
© The Author(s), 2022. Published by Cambridge University Press on behalf of the Michael G. Foster School of Business, University of Washington

Footnotes

We thank an anonymous referee, Ramin Baghat (discussant), Shai Bernstein, Bo Bian, Alice Bonaime, Alvin Chen, Ding Dong, Mara Faccio (the editor), Yuan Gao, Mariassunta Giannetti, Isaac Hacamo, Camille Hebert, Po-Hsuan Hsu, Dalida Kadyrzhanova, Steve Karolyi, Omesh Kini, Sandy Klasa, Xing Liu, Guangli Lu, Antonio Macias, Jean-Marie Meier (discussant), Koray Sayili, Merih Sevilir (discussant), Tim Simcoe (discussant), Elena Simintzi (discussant), Wenyu Wang, Mike Woeppel, Qinxi Wu, Ting Xu, seminar participants at Baylor University, Carnegie Mellon University, Central University of Finance and Economics, Chapman University, Chinese Academy of Finance and Development, City University of Hong Kong, Development Bank of Japan, Georgia State University, Indiana University, Renmin University, Temple University, Texas Christian University, UBC, University of Arizona, Wilfrid Laurier University, and York University, and participants at the 2019 FMA European Conference, the 2019 Workshop on Corporate Governance and Investor Activism, the 2020 SFA Conference, the 2020 UBC Winter Finance Conference, the 2020 SFS Cavalcade, the 2020 Intellectual Property and Technology Markets Conference, the 2021 AFA Meetings, the 2021 EFA Meetings, and the 2021 FMA Meetings for helpful comments. We thank Xing Liu and William Zheng for excellent research assistance. Li and Wang acknowledge financial support from the Social Sciences and Humanities Research Council of Canada (Grant Numbers: 435-2018-0037 and 435-2019-0425, respectively), and Li acknowledges financial support from the Sauder Exploratory Grants Program, the PH&N Center for Financial Research/Bureau of Asset Management, the Beijing Outstanding Young Scientist Program (BJJWZYJH01201910034034), and the 111 Project (B20094). All errors are our own.

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