Abstract
When examining how geographic location affects acquisitions, existing research has largely overlooked that many acquired firms operate in multiple locations. We examine the role of inter-firm and intra-firm agglomeration effects through the use of acquisitions of multi-location targets in knowledge-intensive industries, focusing on the importance of knowledge transfer. We argue that in such settings, acquirers value specific location characteristics of multi-location firms and not aggregate location characteristics. We hypothesize that in knowledge-intensive industries, an acquirer is more likely to select a multi-location target the higher the knowledge intensity of its most knowledge-intensive location. We also hypothesize that in knowledge-intensive industries, an acquirer is more likely to select a multi-location target the more locations their operations overlap because it facilitates internal knowledge transfer in the combined firm. Using a sample of multi-location acquisitions of US manufacturing firms between 2002 and 2004 and employing a discrete choice methodology, we find support for these predictions. Our results highlight the importance that specific locations play in the choice of multi-location acquisition targets.
Original language | English (US) |
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Pages (from-to) | 125-155 |
Number of pages | 31 |
Journal | Strategic Organization |
Volume | 11 |
Issue number | 2 |
DOIs | |
State | Published - May 2013 |
Bibliographical note
Copyright:Copyright 2013 Elsevier B.V., All rights reserved.
Keywords
- Acquisitions
- geography
- multi-location firms