An analysis of the relation between R&D and M&A in high-tech industries

Abstract

This article discusses the relation between research and development (R&D) investment and mergers and acquisitions (M&A) in Japanese high-tech industries. Using a count data model, it is found that there exists a positive correlation (complementarity) between R&D investment and M&A.

Acknowledgements

The author would like to thank Akira Furukawa, Tetsuro Shimamoto, Hiroyuki Aman, Kimio Morimune and William H. Greene for their helpful comments and suggestions.

Notes

¹ A more detailed description of the motivation for M&A is provided in Odagiri and Hase (1989).

² Count data models are described in Greene (1997), Cameron and Trivedi (1998) and Winkelmann (2003).

³ See Greene (1994).