Template-type: ReDIF-Paper 1.0
Author-Name: Marius Berger
Author-Name: Sara Calligaris
Author-Name: Andrea Greppi
Author-Name: Dmitri Kirpichev
Title: Acquisitions and their effect on start-up innovation: Stifling or scaling?
Abstract: This paper highlights a critical issue in the innovation ecosystem ‒ whether acquisitions of start-ups by incumbent firms foster or stifle innovation. Using a unique firm-level dataset covering 60 countries for the period 2001-2021, the study finds that acquisition targets are highly innovative before the deal, and acquirors are generally innovation-oriented firms. Acquired start-ups are also technologically close to their acquirors and often share the same industries and countries, suggesting potential market synergies. However, post-acquisition, start-up patenting declines without a corresponding increase in the acquiror's innovation activity, raising concerns that such deals may serve anti-competitive purposes rather than enhancing innovation.
Classification-JEL: D22; L26; O31; O32
Keywords: Acquisitions, Innovation, Start Ups
Creation-Date: 2025-06-25
Number: 2025/10
Handle: RePEc:oec:stiaaa:2025/10-EN