M&A can be a key avenue to grow firms by dynamically reconfiguring their capabilities and enabling them to sustain innovation and adapt to change in the environment. In particular, M&A is effective when intangible assets that are key to innovation are hard to imitate because of corporate inertia or institutional constraints. Pre-war electricity firms, which were founded by entrepreneurs and which realized fast growth without state backing, resorted to M&A to further growth amid a wave of innovation at the time in hydroelectric power generation technology. Such M&A was aimed at acquiring water rights, which were non-imitable intangible assets essential for the technology, as well as at attaining scale economies and capital. Such M&A constitutes an example of “M&A to innovate,” by which firms pursue innovation by dynamically reconfiguring their capabilities. Additionally, this is an early example of M&A in which anti-trust policy and promotion of innovation were balanced.

This paper examines how business relations with customers affect the performance of a startup. The analysis is based on panel data about firms established in 2006. Business relations affect startup performance on the two dimensions: commercial and non-commercial transactions. Regarding the former dimension, those firms which established business relations with the client of the former employer and deal with more customers at startup show a higher survival rate. However, firms which have built business relations at birth do not enjoy higher growth. This implies that survival factors do not guarantee firm growth and that growth depends on efforts for acquiring new clients after startup. Regarding the latter dimension, it is confirmed that those firms which seek referral to new clients for existing customers experience higher growth. Startups require trust to gain new clients. Seeking referral for existing customers can be an effective tool for getting trust.

In this paper, we examine the relationship between the sluggish IPO activity and the quality of IPO firms. We developed proxies of firm quality and found several interesting phenomena using those metrics; (1) the level of quality differs by the listing timing. Currently, stock exchanges seem never allow low quality firms to go public, (2) we could not observe any difference in firms’ quality on different junior markets, (3) even for firms with the same level of quality, the actual listing criteria may differ by industry, (4) stock exchanges and underwriters seem to fail to identify potential high-growth firms using their listing criteria. We need to mitigate the information asymmetry to revitalize the market.

This paper examines the structural change of U.S. venture capitals in this decade, from the point of their investment and fund performance. By using data of individual venture capital funds, it is found that high performance of U.S. venture capital funds is limited to the late 1990s and their low performance continues after the Internet bubble. The major findings are: (1) the gap between high performance funds and other funds is historically large; (2) top-performing venture capital firms continue to gain high fund performance; and (3) high performance of the funds is mainly attributed to great successful IPOs of few specific portfolio companies. The recent low performance reflects the IPO crunch in the U.S. stock market, and the venture capitals try to find their opportunity in emerging countries and new industries.