Does acquisition lead to the growth of high-tech scale-ups? : evidence from Europe

Burger, Anže (author), Hogan, Teresa (author), Kotnik, Patricia (author), Rao, Sandeep (author), Sakinç, Mustafa Erdem (author)

The post-acquisition growth of high-tech scaleups has received relatively little research attention. This is surprising since buyers are known to target these firms for growth opportunities whilst sellers increasingly seek strategic partners to access resource to scale their ventures. We examine the post-acquisition revenue and employment growth of high-tech scaleups in a multi-country setting, comprising five European economies. Using a propensity-score matching approach and difference-in-differences regression, for a sample of 2187 high-tech scaleups, we demonstrate that acquisition has a positive effect on target firms equivalent to cumulative growth of revenue (employment) of 9–13 (6−10) percent after five (four) years, relative to control firms. We find that nationality matters such that the targets of foreign-owned acquirers exhibit significantly higher cumulative revenue and employment growth than their domestic counterparts. Taking a longer-term perspective, we show that growth dips in the first year, then stabilizes and accelerates in the years following acquisition, indicating a period of adjustment.

• Language: English
• Keywords: enterprises, company performance, acquisitions, cross-border acquisitions, domestic acquisitions, firm growth, high-tech scaleups, propensity-score matching
• Work type: Article
• Typology: 1.01 - Original Scientific Article
• Organization: FDV - Faculty of Social Sciences; EF - School of Economics and Business
• Publication status: Published
• Publication version: Version of Record
• Year: 2023
• Number of pages: 20 str.
• Numbering: Vol. 64, art. 101820
• PID: 20.500.12556/RUL-143839
• UDC: 005.3
• ISSN on article: 0275-5319
• DOI: 10.1016/j.ribaf.2022.101820
• COBISS.SI-ID: 131224067
• Publication date in RUL: 13.01.2023

Record is a part of a journal

• Title: Research in international business and finance
• Shortened title: Res. int. bus. financ.
• Publisher: Elsevier
• ISSN: 0275-5319
• COBISS.SI-ID: 512590361

Licences

• License: CC BY-NC-ND 4.0, Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International
• Link: http://creativecommons.org/licenses/by-nc-nd/4.0/
• Description: The most restrictive Creative Commons license. This only allows people to download and share the work for no commercial gain and for no other purposes.

Secondary language

• Language: Slovenian
• Keywords: podjetje, poslovanje podjetja, pripojitve podjetij