TY - JOUR
T1 - Start-up Acquisitions, Venture Capital and Innovation: A Comparative Study of Google, Apple, Facebook, Amazon and Microsoft
AU - Gugler, Klaus
AU - Szücs, Florian
AU - Wohak, Ulrich
PY - 2025
Y1 - 2025
N2 - We evaluate the impact of big-tech acquisitions on the incentives for venture capital (VC) investment and innovation. Using data on several hundred acquisitions by Google, Apple, Facebook, Amazon and Microsoft (GAFAM), we study the evolution of VC investment and patenting in affected technology fields relative to control groups. The results show a clear negative impact on VC investment, while the effect on innovation depends on the acquirer and period. Over time, the treatment effects on both outcomes improve, as GAFAM firms' product and tech-portfolios become more similar. Yet, around 14% of acquisitions impact both metrics negatively.
AB - We evaluate the impact of big-tech acquisitions on the incentives for venture capital (VC) investment and innovation. Using data on several hundred acquisitions by Google, Apple, Facebook, Amazon and Microsoft (GAFAM), we study the evolution of VC investment and patenting in affected technology fields relative to control groups. The results show a clear negative impact on VC investment, while the effect on innovation depends on the acquirer and period. Over time, the treatment effects on both outcomes improve, as GAFAM firms' product and tech-portfolios become more similar. Yet, around 14% of acquisitions impact both metrics negatively.
U2 - 10.1016/j.ijindorg.2025.103148
DO - 10.1016/j.ijindorg.2025.103148
M3 - Journal article
SN - 0167-7187
VL - 99
JO - International Journal of Industrial Organization
JF - International Journal of Industrial Organization
IS - March 2025
M1 - 103148
ER -