Understanding Value Creation in Acquisitions: A Fuzzy-set Configurational Approach

Abstract

Extant work has predominantly investigated how acquisitions create value by focusing on the isolated effects of individual determinants. We propose that this approach needs to be complemented with a configurational one that captures the multi-dimensional fit among these factors, thus lending itself to a more accurate depiction of the mechanisms through which acquisitions create—and fail to create—value. Using fuzzy-set qualitative comparative analysis (fsQCA), we draw on a fine-grained dataset of 101 acquisitions to examine the fit among three sets of factors that cover the essence of the existing acquisition literature: pre-deal characteristics, the acquirer’s acquisition capabilities, and post-acquisition decisions. Our findings highlight different configurations leading to value creation and failure thereof, together with novel insights regarding the multi-dimensional fit between the underlying factors.