Title: Acquisitions as a means of innovation sourcing by incumbents and growth of technology-oriented ventures

Authors: Marcus Wagner

Addresses: Scholler Chair in Technology and Innovation Management, Technische Universitat Munchen, Arcisstr. 21, 80333 Munchen, Germany; Bureau d'Economie Theorique et Appliquee, Universite Louis Pasteur, Strasbourg, 61 avenue de la Foret Noire, 67085 Strasbourg Cedex, France

Abstract: The permanent need for innovation activities in high tech industries challenges large firms. Small firms, on the other hand, frequently face decisions as concerns their growth which may, e.g., in the case of lacking complementary assets, lead them to sell-off to larger incumbents. This paper investigates how this leads to a division of innovation activities between large and small firms in the electronic design automation (EDA) industry. Based on qualitative interviews and a structured survey the paper analyses empirically the reasons for acquisitions and shows that these mainly concern small firms that pursue (especially organisationally) radical innovation and that they enable radical growth of small firms.

Keywords: acquisitions; high tech firms; innovation sourcing; technology-oriented ventures; incumbents; entrants; incremental innovation; radical innovation; economic growth; high technology; electronic design automation; EDA industry; small firms; firm growth.

DOI: 10.1504/IJTM.2010.035858

International Journal of Technology Management, 2010 Vol.52 No.1/2, pp.118 - 134

Published online: 06 Apr 2013 *

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