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Learning Through Acquisitions

Published on Jun 1, 2001in Academy of Management Journal7.191
· DOI :10.5465/3069364
Freek Vermeulen12
Estimated H-index: 12
(LBS: London Business School),
Harry G. Barkema22
Estimated H-index: 22
(Tilburg University)
Abstract
Research on acquisitions has typically focused on acquisitions per se, examining issues such as performance and implementation problems. This study moves beyond that perspective and studies the influence on a firm's later expansions. We argue that exploitation of a firm's knowledge base through “greenfields” eventually makes a firm simple and inert. In contrast, acquisitions may broaden a firm's knowledge base and decrease inertia, enhancing the viability of its later ventures. Over time, firms strike a balance between the use of greenfields and acquisitions. Various implications of this theory—tested with survival analysis and “logit” models—were strongly corroborated.
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