Inventors’ Response to Firm Acquisitions

Mergers and acquisitions (M&As) constitute a disruption to the workingenvironment of the inventive labor force of the acquired company. If inventors wouldrespond with a decline of their patent productivity or departure from the firm thiscan be detrimental to the innovative process within the merged entity and can becontradictory to the aims of the firm acquisition. This paper provides empiricalevidence on post-merger mobility and productivity of 673 inventors employed byEuropean acquisition targets in the years 2000 and 2001. The empirical results showthat 1.) the most productive and experienced individuals stay with the mergedentity; 2.) inventors that left the acquired firm are less productive in post-mergeryears than those that stayed with the merged entity; 3.) M&As trigger inventormobility, but do not lead to a decline in patent productivity if compared to a controlgroup of inventors that have not been involved in a firm acquisition.