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The impact of experience on private target acquisition in high-technology industries

Lookup NU author(s): Dr Jungho KimORCiD

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Abstract

This paper investigates the impact of an acquirer’s experience on the acquisition of private firms (i.e., private target acquisition) in high-technology industries by analyzing a dataset of NASDAQ-listed firms operating in information technology (IT) industries. Specifically, this paper examines whether two types of experience (i.e., early venture capital (VC)-backed experience and prior mergers and acquisitions (M&A) experience) matter to the acquisition. We find that both types of experience have positive effects on private target acquisition, while only prior M&A experience positively influences public target acquisition, implying that early VC-backed experience is effective in mitigating information asymmetry related to private target acquisition and exploring opportunities for value creation. We also find that an acquirer’s growth performance and absorptive capacity prior to the acquisition enhance the positive effects of the experiences on private target acquisition. Keywords: private target acquisition; early venture capital backing; M&A experience; information asymmetry; high-technology industry; information technology

Publication metadata

Author(s): Jo Y, Kim J

Publication type: Article

Publication status: Published

Journal: Sustainability

Year: 2019

Volume: 11

Issue: 6

Online publication date: 16/03/2019

Acceptance date: 13/03/2019

Date deposited: 15/05/2024

ISSN (electronic): 2071-1050

Publisher: MDPI

URL: https://doi.org/10.3390/su11061603

DOI: 10.3390/su11061603

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