1.

The outsourcing of R&D through acquisitions in the pharmaceutical industry

2. Determinants of Cross-Border Mergers and Acquisitions

3. COMPLEMENTARY TECHNOLOGIES, KNOWLEDGE RELATEDNESS, AND INVENTION OUTCOMES

IN HIGH TECHNOLOGY MERGERS AND ACQUISITIONS

4. R&D and the Incentives from Merger and Acquisition Activity

5. Uncertainty avoidance, risk tolerance and corporate takeover decisions

6. Critical analysis of valuation and strategical orientation of merger and acquisition deals in the
pharmaceutical industry

7. Chinese Cross-Border M&A: Past Achievement, Contemporary Debates and Future Direction

8. R&D and M&A: Are cross-border M&A different? An investigation on OECD countries

9. Cross-border mergers and acquisitions for innovation

10. Differences in returns to cross-border M&A in the short and long run: Evidence from Chinese
listed firms

Matthew et al (2005) did a M&A research on the outsourcing R&D in the pharmaceutical industry
by examining 160 pharmaceutical acquisitions from 1994 to 2001 and they find that on average
acquirers have significant positive returns which are positively correlated with prior acquirer
access to information about the research and development activities at target firms and a
superior negotiating position. Moreover, they created Desperation Index to determine the
current status of a firm’s internal productivity and they find that firms decreasing in internal
productivity are more likely to engage in an outsourcing-type acquisition in order to improve
their research capacity.

Dierks et al (2017) also did a M&A research in the pharmaceutical industry. They studied existing
literature in order to critically analyze valuation and the strategical orientation of pharmaceutical
companies. The researchers analyze two examples of completed M&A deals above 1bn USD in
2016. Pfizer acquiring Medivation and Mylan acquiring Meda to present the sequence within a
tender offer and subsequently analyze the evolution of share prices from the acquirer and the
target through a scientific financial approach using financial data providers. Secondly, they focus
on the main motives for M&A transactions and whether they are resilient to the core business
models of the acquirer. In conclusion, the pharmaceutical industry is undergoing major changes
due to a changing macro- and micro-landscape. To respond the fast-moving environment, and to
create new innovative drugs, pharmaceutical companies are strategically looking to generate
inorganic growth through M&A.

Gordon M. Phillips and Alexei Zhdanov (2012) examine how the market for mergers and
acquisitions affects the decision to conduct research and development (R&D) and innovate. They
present a model and the empirical tests showing how an active acquisition market positively
affects both small and large firms’ incentives to innovate and conduct R&D. They conclude that
M&A activity strongly increases firms’ incentives to conduct R&D, but less for large firms as they
may buy smaller firms for their technology to use it in their existing business and competition
also increases incentives for firms to conduct R&D, especially for small firms.

Marianna et al (2010) develop a model of relatedness and invention performance of high-

technology M&As that considers science and technology similarity and complementarity as
important drivers of invention. They find that complementary scientific knowledge and
complementary technological knowledge both contribute to post-merger invention performance
by stimulating higher quality and more novel inventions, which suggests that high-technology
firms seeking acquisitions should search for, identify, and acquire businesses that have scientific
and technological knowledge that is complementary to their own. The results also suggest that
similarities in knowledge facilitate incremental renewal, while complementarities would make
discontinuous strategic transformations more likely, and that absorptive capacity research should
be expanded to consider complementarities as well as similarities.

ISIL et al (2012) analyze a sample of 56,978 cross-border mergers between 1990 and 2007,
focusing on factors that potentially affect cross-border mergers but are not present to the same
extent in domestic mergers, such as cultural differences, geographic differences, country-level
governance differences, and international tax effects. They find that geography, the quality of
accounting disclosure, and bilateral trade increase the likelihood of mergers between two
countries. Moreover, valuation appears to play a role in motivating mergers: firms in countries
whose stock market has increased in value, whose currency has recently appreciated, and that
have a relatively high market-to-book value tend to be purchasers, while firms from weaker-
performing economies tend to be targets.

Olivier Bertrand and Pluvia Zuniga (2006) investigates the incidence of national and cross-border
mergers and acquisitions (M&A) on private research and development (R&D) investments in
OECD countries over the period 1990–1999. They find that the last M&A wave did not have any
significant effect on domestic R&D activities. M&A only contributed to increase R&D investment
in some specific industries. This result emphasizes a weak influence of M&A on aggregated R&D
investment. Secondly, their results provide evidence that domestic and cross-border M&A
differed in their impact on R&D investment. Only domestic operations seem to have stimulated
R&D investment in low-technology intensive industries. However, it cannot be concluded that
domestic M&A led to more R&D investment; domestic M&A diminished R&D investment across
OECD nations in medium-technology intensive industries, while inward cross-border M&A tended
to have the opposite effect. In these industries, host countries’ target firms, and not home
countries’ buyer firms, seem to have benefited from M&A operations.

Po-Hsuan et al (2020) empirically examine cross-border mergers and acquisitions (M&As) as an

important dimension of firms’ innovation strategies, based on a sample of 85,591 M&A deals
from 57 countries, show that innovative firms in low innovation countries are more likely to
undertake cross-border deals, and select innovative targets when doing so, as compared with
innovative firms in high innovation countries. They also find that these cross-border M&As earn
higher announcement stock returns when compared to domestic deals. On the other hand, they
show that innovative firms from low innovation countries produce more patents and invest more
in research and development (R&D) after they acquire targets in high innovation countries. Their
study provides new evidence to the absorptive capacity theory from an international perspective.

Yibing et al (2021) study the impact of cross-border M&A on the short and long-term
performance of firms through the event study method and the propensity score matching–
difference-in-differences regression method, based on the cross-border mergers and acquisitions
(M&A) events of Chinese listed firms between 2009 and 2018. The results indicate that in the
short run, Chinese firm cross-border M&A acquire significant, positive cumulative abnormal
returns (CARs) within a 21-day event window. In the long run, cross-border M&A fail to improve
firm returns on assets (ROA). Furthermore, their paper uncovers that the impact of M&A on ROA
varies with the characteristics of acquirers and host countries, and the impact on CAR varies with
the characteristics of deals and are not sensitive to characteristics of acquirers or host countries.
They also identify the differing impacts of China’s “going out” strategy on firm performance in the
short and long run and provides explanations for a deeper understanding of the cross-border
M&A of Chinese listed firms.

Yipeng Liu and Ping Deng focus on the study of the Chinese cross-border merger and acquisition
(M&A) amid the rising trend of multinational companies from emerging economies. Based on a
systematic review of published papers in top international business/strategy/organization
journals on Chinese overseas M&A, they offer a tentative multilevel framework and suggest that
Chinese overseas M&A research should emphasize on a process perspective ranging from pre-
acquisition to post-acquisition. Importantly, they identified three specific research areas that
carry great potential for a promising line of scholarly inquiry from the M&A process perspective.
Three areas in the context of Chinese cross-border M&A include: (1) negotiation, (2) learning and
knowledge management, and (3) leadership and HRM. In addition, qualitative research and
methodological pluralism should be embraced to achieve this goal due to the nature of this
emerging field of Chinese cross-border M&A.

Bart et al (2013) examine the role of national culture in corporate takeover decisions, by arguing
that managerial risk tolerance, a measure that encompasses both a person’s risk aversion and risk
perception, at the national level, is a cultural trait and affects the expected net synergies CEOs
require. They propose a theoretical framework that links CEO risk tolerance to the expected net
synergies. Their empirical study shows that CEOs of firms located in countries with lower levels of
risk tolerance, measured by Hofstede’s (1980, 2001) uncertainty avoidance score, require higher
premiums on takeovers, and uncertainty avoidance plays a greater role in relatively large
takeovers. Additional testing reveals that CEOs from high uncertainty avoiding nations engage
less in cross-border/cross-industry takeovers, suggesting that uncertainty avoidance captures
more the CEO’s risk perception than his/her risk aversion.