My Research
Working Papers:
Innovation strategy: Radical and Incremental Innovations in M&A deals
[Link to Most Recent Version]
Abstract: I examine whether acquirers can exploit the stock of innovative ideas of targets in a sample of public-to-public M&A deals. I distinguish between radical innovation, which involves cutting-edge technologies that are influential for a wide range of future technologies, and incremental innovation, which leverages already established innovations in new ways. Using a new hand-collected database that has market values for radical and incremental innovations, I provide two sets of findings. Firstly, the purchased innovations positively influence the sales growth of a new entity through the adoption of new technologies. Secondly, acquirers relying on scope and scale tend to pursue acquisitions focused on radical innovation, whereas cash-endowed acquirers gravitate towards incremental innovations.
Keywords: Innovation, R&D, Radical and Incremental technologies, Acquisitions, Mergers
Presentations: SFI Research Days (Switzerland) Best Paper Award, International Conference Computing in Economics and Finance (France)
with Rüdiger Fahlenbrach, Leandro Sanz, and René M. Stulz
Abstract: From 2010 to 2021, 639 US VC-funded firms achieved unicorn status. We investigate why there are so many unicorns and why founders grant investors privileges to obtain unicorn status. Unicorns rely more than other VC-funded startups on organizational capital and network effects. Unicorn status enables startups to access new sources of capital, and growth in available funding causes the number of unicorns to increase. As a result, unicorns can stay private longer, which enables them to grow their organizational intangible assets with less expropriation risk and better capture the economies of scale on which their business model relies.
Keywords: Innovation, R&D, Radical and Incremental technologies, Acquisitions, Mergers
Media: Harvard Law School Forum on Corporate Governance, NBER Digest