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The Impact of Experience on Private Target Acquisition in High-Technology Industries

1 and 2,*
1
KISDI (Korea Information Society Development Institute), Jincheon, Chungbuk 27872, Korea
2
Faculty of Business and Law, Swinburne University of Technology, Hawthorn, Victoria 3122, Australia
*
Author to whom correspondence should be addressed.
Sustainability 2019, 11(6), 1603; https://doi.org/10.3390/su11061603
Received: 15 February 2019 / Revised: 6 March 2019 / Accepted: 13 March 2019 / Published: 16 March 2019
(This article belongs to the Section Economic, Business and Management Aspects of Sustainability)
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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. View Full-Text
Keywords: private target acquisition; early venture capital backing; M&A experience; information asymmetry; high-technology industry; information technology private target acquisition; early venture capital backing; M&A experience; information asymmetry; high-technology industry; information technology
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).
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Jo, Y.; Kim, J. The Impact of Experience on Private Target Acquisition in High-Technology Industries. Sustainability 2019, 11, 1603.

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