Who buys whom: information environments and organizational boundary spanning through acquisitions

Item Type Journal paper
Abstract

Companies extend their boundaries through acquisitions to new industries, product lines, technologies, markets and geographic locations. Diversification research has focused predominantly on boundary extensions across industries. Using data on 167 intra-industry acquisitions in the pharmaceuticals industry between 1991 and 1996, we study boundary extension in an industry, integrating existing arguments to examine how proximity in intraindustry networks, geographic location, and technological domain influences the likelihood of acquisition. As expected, the proximity of two firms in these search contexts increases the likelihood that one will acquire the other, but the contexts are partial substitutes, proximity in one search context overcoming distance in other contexts.Thus, we find that while pharmaceutical companies are more likely to acquire technologically similar foreign companies, they are more likely to acquire technologically dissimilar alliance partners. Our results contribute to an improved understanding of who buys whom and in doing so, organizational boundary spanning through acquisitions.

Authors Schildt, Henri & Laamanen, Tomi
Journal or Publication Title Strategic Organization
Language English
Subjects business studies
HSG Classification contribution to scientific community
Refereed Yes
Date 1 May 2006
Publisher Sage
Place of Publication London
Volume 4
Number 2
Page Range 111-133
Number of Pages 23
ISSN 1476-1270
ISSN-Digital 1741-315X
Publisher DOI 10.1177/1476127006064065
Depositing User Prof. Dr. Tomi Laamanen
Date Deposited 25 Jan 2013 15:55
Last Modified 23 Aug 2016 11:15
URI: https://www.alexandria.unisg.ch/publications/219940

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Citation

Schildt, Henri & Laamanen, Tomi (2006) Who buys whom: information environments and organizational boundary spanning through acquisitions. Strategic Organization, 4 (2). 111-133. ISSN 1476-1270

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https://www.alexandria.unisg.ch/id/eprint/219940
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