Acquired, transferred and integrated knowledge: a study of M&A knowledge performance

Abstract

PurposeThe acquisition of knowledge through mergers and acquisition (M&A) may not create value—usually because the knowledge may not be transferred, or transferred but not integrated. The purpose of this paper to develop and test a theoretical model of knowledge and performance in the M&A process.Design/methodology/approachTheory, model and case analysis.FindingsThe literature review led us to distinguish between three main categories of knowledge along the different stages of the M&A process: acquired knowledge in the pre-merger stage; and transferred knowledge and integrated knowledge in the post-merger stage. The application of the model is illustrated in a case study of technology M&A, which includes data collected from annual reports before and after the merger.Research limitations/implicationsThe model recommends acknowledging the differences between the acquired knowledge, transferred knowledge and integrated knowledge when examining the relationship between knowledge and performance in M&As. In addition, the model suggests considering several factors that influence future knowledge integration in the pre-merger stage. Ignoring the three categories and the factors may be the reason for the reports of previous studied stating that the acquisition of knowledge-based resources is associated with negative announcement returns to the acquiring firm.Originality/valueThe paper presents new procedures to measure knowledge, collecting data on R&D employees by using annual reports. In addition, the paper suggests adding “in-process R&D” as an “Acquired Knowledge” measure.