This dissertation is on mergers and acquisitions (M&A). Two studies are proposed to examine what factors impact performance and partner selection in the context of M&A Event study methodology is used to capture the capital market effects of announcements of M&A in both studies. Four hundred and eighty two announcements are identified from 1980 to 2011 from the SDC M&A database. Other data sources include CRSP and COMPUSTAT. The Wall Street Journal and PR Newswire are used to specify the announcement dates.
Previous research examines the impact of corporate strategy on performance. Study one extends previous research by introducing the notion of alignment between corporate strategy and strategic objective. Corporate strategy is of two types — value creation (emphasis on R&D) or value appropriation (emphasis on marketing). Strategic objectives are operationalized as either enhancement or diversification. The study proposes that firms whose corporate strategies are aligned with strategic objectives are better performers than those that are not aligned. Empirical findings based on capital market reactions strongly support this proposition.
Study two accesses the effect of capability alignment between acquiring and acquired firms. Capability alignment between strategic partners is operationalized along marketing and R&D Empirical results show that the capital market favors acquiring firms that have strong R&D capability. Although technological innovation is a motivating factor in a firm's acquisition, capital market actually favors acquiring firms that have weak R&D capability but strong marketing capability and acquired firms that have weak R&D but strong marketing capability for their enhancement objective.
|Commitee:||Hu, Michael, Patuwo, Butje|
|School:||Kent State University|
|School Location:||United States -- Ohio|
|Source:||DAI-A 75/08(E), Dissertation Abstracts International|
|Keywords:||Alignment, Event study, Marketing capability, Mergers and acquisitions, Research and development capability|
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