What we see depends upon where we stand

The mechanism of technological knowledge transfer on merger

Abstract

This study examines effects of technological knowledge transfer on post merger knowledge transfer based on theories of organizational learning and absorptive capacity. Although prior studies on mergers tend to take the standpoint of firms that merge others, this study examines post-merger technological knowledge transfers by taking both sides of firms that merge others and those that are merged by others. By using patent and merger data in the Japanese chemical industry from 1996 to 2008, this study shows that technological knowledge transfer occurs when merging firms' low technological similarity and merged firms' high technological similarity are both high.