Technological breadth and depth of knowledge in innovation: the role of mergers and acquisitions in biotech

We analyze the diffusion and integration of external knowledge by distinguishing between the depth and breadth of technological knowledge in combination with the type of partner and channel of exchange. Using a latent variable structural equation model with a sample of 202 US biotechnology firms between 1990 and 2009, we investigate the extent to which the mergers and acquisitions with different partners contribute to the depth and breadth of the focal firm's knowledge base. Our analysis also addresses potential endogeneity issues and shows that acquisitions of related firms mainly increase the depth of knowledge, while acquisitions of unrelated firms develop the breadth of knowledge.

This is a pre-copyedited, author-produced version of an article accepted for publication in Industrial and Corporate Change following peer review. The version of record Suman Lodh, Maria Rosa Battaggion; Technological breadth and depth of knowledge in innovation: the role of mergers and acquisitions in biotech. Ind Corp Change 2015; 24 (2): 383-415. doi: 10.1093/icc/dtu013 is available online at: https://doi.org/10.1093/icc/dtu013 and DOI: 10.1093/icc/dtu013