The effect of technology driven mergers and acquisitions on firm performance in the U.S. textile industry

Abstract

To maintain the pace of innovation and survive in today’s competitive global market, a growing number of textile companies are acquiring technology assets strategically through mergers and acquisitions (M&A). This study examines how technology-driven M&A affects firm performance in the U.S. textile industry using U.S. patent and stock market data spanning a 35-year timeframe (1980–2015). The study primarily compares technology-driven M&A stock performance with its non-technology-driven counterpart. The results suggest that technology-driven M&A lead to significantly improved stock performance immediately following the M&A announcement, whereas non-technology-driven M&A negatively impact acquiring firms’ stock market performance in both the short and long terms. This study provides direct insight into the impact of technological acquisition on shareholder value in the U.S. textile industry.

Keywords:

• mergers and acquisitions
• technology-driven M&A
• U.S. textile industry
• firm performance

Disclosure statement

No potential conflict of interest was reported by the authors.