The Research On The Effect Of M&A On Innovation Capacity

In the past, the enterprises' innovation activities are equivalent to the in-house R&D. For many enterprises, a strong internal R&D capability is the only way to obtain technical innovation. If other competitors want to compete in the market, they must invest considerable resources to establish their own laboratories. However, since the 90s of the 20th century, a growing number of industry-leading companies have to face strong competition from new start-ups. These new entrants have little or no internal R&D institutions, but through the acquisition to obtain new technologies from outside. In other words, more and more enterprises have taken M&A as an important part of the innovation process.In this paper, we adapt the resource-based view. Stressing the important role of resources to enterprises, the paper studies the effect of M&A on innovative capacity through grafting resources. Combined with organizational learning theory, the paper also analyses the acquisition's impact on corporate knowledge base and absorptive capacity. Theoretical studies suggest that the searching, recognition, access and absorption are important parts to innovation capacity, and by access to external resources and technology, companies can effectively strengthen their innovative capacity. Therefore, the innovative activities of enterprises will not only include internal R&D, but also through various channels to obtain information beyond its borders, such as the acquisition of other companies.The empirical studies on the U.S. ICT industry have shown that, M&A as an important method of accessing information outside the enterprise have a positive impact on innovative capacities. The shortening of product cycles and the accelerated technological change have made more and more enterprises choose M&A as the way to obtain necessary resources quickly and effectively. Like internal R&D activities, by M&A, the company can also expand the knowledge base, and at the same time increase the absorptive capacity of enterprises. In addition to technology, M&A can also bring the market-related resource such as brand. With the study on the 29 companies in the U.S. ICT industry, within five years, there has a significant positive impact of M&A on the following innovative capacity of the enterprise. At the same time, along with the increasing of the external technology obtained, its contribution to innovative capacity has also gradually increased.