Start-up Acquisitions, Venture Capital and Innovation: A Comparative Study of Google, Apple, Facebook, Amazon and Microsoft

Publication: Working/Discussion PaperWU Working Paper

1144 Downloads (Pure)

Abstract

We evaluate the impact of big-tech acquisitions on the incentives for investment and innovation. Using data on several hundred acquisitions by Google, Apple, Facebook, Amazon and Microsoft (GAFAM), we study the evolution of venture capital investment and patenting relative to control groups. The results show a clear negative impact on investment, while the effect on innovation depends on the acquirer and period. Both outcomes improve over time, as GAFAM firms become more similar in terms of their product and tech-portfolios, increasing competition. Yet, around 10% of acquisitions impact both metrics negatively.
Original languageEnglish
PublisherWU Vienna University of Economics and Business
DOIs
Publication statusPublished - Jul 2023

Publication series

SeriesDepartment of Economics Working Paper Series
Number340

WU Working Paper Series

  • Department of Economics Working Paper Series

Keywords

  • M&A
  • big-tech
  • innovation
  • investment

Cite this