R&D intensity and acquisition and divestiture of corporate assets: Evidence from Japan |
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Authors: | Tatsuo Ushijima |
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Institution: | aAoyama Gakuin University, Graduate School of International Management, Shibuya 4-4-25, Shibuya-ku, Tokyo 150-8366, Japan |
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Abstract: | This article provides evidence from Japanese acquisitions and divestitures after the late 1990s on the effect of corporate R&D to stimulate inter-firm asset trade. Consistent with the notion that R&D increases a firm's opportunities for and ability to profit from synergy with external assets, regressions performed on a sample of publicly traded manufacturers reveal that R&D intensity and the breadth of patented technologies positively and significantly correlate with a firm's probabilities to acquire and sell off assets. The link of R&D and divestiture is qualitatively homogeneous across industries and time but the positive and significant R&D-acquisition link concentrates in industries where the interdependence of firms’ innovative activities is relatively high and time when firms likely had large pent-up demand for asset trade. |
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Keywords: | R& D Patent Acquisition Divestiture Japanese firm |
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