The Impact Of Horizontal Mergers And Vertical Mergers On Technological Innovation And Corporate Performance

The innovation capability of a firm can be transformed into its core competitiveness.The demands for know-how innovation are increasing in a firm's growth and development.Sole reliance on its own R&D activities might not meet the requirements for new technologies by both the firm and the market.The acquirer can quickly obtain the technologies maintained by the target via M&A.If the technological differences between the acquirer and the target can be reasonably integrated to achieve technological synergy,the acquirer can obtain certain technological R&D advantages.Therefore,M&A has become an important way for mang enterprises to seek technological breakthroughs.However,the M&A strategy of enterprises may be horizontal,vertical or mixed M&A.Due to the difference of technology related degree of different types of M&A,the difficulty of integration and effect of M&A are also different,so this paper focuses on whether there are differences in the promotion effect of different types of M&A on the technological innovation ability of enterprises.Based on the characteristics of frequent M&A activities and high dependence on Technology in the pharmaceutical industry,this paper chooses two pharmaceutical enterprises as the case study objects,namely,the horizontal merger between Furen and Kaifeng Pharmaceutical,the vertical merger between Bikang and Runxiang Pharmaceutical.This paper adopts the research method of combining theory and case analysis to explore the influence of the horizontal and vertical merger of Chinese pharmaceutical enterprises on the technological innovation ability of enterprises after M&A.In addition,in the construction of performance evaluation system of technological innovation,this paper innovatively introduces patent value evaluation to measure the quality of innovation output.The results show that horizontal M&A has a positive role in promoting technological innovation after M&A,while vertical M&A has no significant impact on the improvement of technological innovation ability.As for the transformation of technological innovation to enterprise performance,it needs the cooperation of other strategies.The above research findings are helpful for enterprises to make more appropriate strategic decisions and enhance the focus on M&A integration in the future,so as to reduce the risk of M&A failure.