Absorptive Capacity and Post-Merger Inventor Productivity

Inventors often experience a low productivity after their company has been
subject to a merger or acquisition (M&As). It is of central managerial interest to identify
factors facilitating the integration of new inventive staff and thereby counteracting innovation
declines after M&As. This paper provides empirical evidence into the role of
acquiring firms’ absorptive capacity for the post-merger patent productivity of the acquired
inventors. Based on a sample of 544 inventors employed by European acquisition targets in
the period 2000–2001 it is shown that the post-merger productivity of acquired inventors is
significantly higher within acquiring firms with a distinct absorptive capacity. It can be
concluded that absorptive capacity is a firm capability that enhances the integration of
inventors after firm takeovers.