Review of the Literature on the Impact of Mergers on Innovation

Both M&A and innovation are instruments for growth and competitive advantage.Therefore they are fundamental to each firm’s competitive strategy. Usually, both instrumentshave been studied separately, but much less in conjunction. This is unfortunate as bothprocesses - the process of innovation and the process of mergers and acquisitions - areintimately connected. The impact of mergers on innovation can only be rigorously assessed, ifthe converse direction of influence - mergers caused by innovation - is accounted for.Therefore this review tries to take a balanced view on both processes and to point out linksbetween them. Nevertheless, the focus is on the impact of mergers on innovation. Thisdiscussion paper is identical with an older version with the title ‘Review on the Literature ofMergers on Innovation.