Cross border acquisitions and R&D activities: a comparative study in the Italian red biotech industry

In fast growing markets, technology-grafting acquisitions provide rapid and exclusive access to technologies and capabilities of the acquired firm. This paper focuses on the impact of cross border acquisitions on R&D activities of the target firms in order to answer these research questions: are these firms in the post-acquisition stage more innovative? What are the main reasons? Four Red biotech acquired companies are used as multiple case study. Results suggest that the target companies take advantage of the acquisition in terms of: a boost to their R&D activities; R&D synergies with the buyer; developments of their research and growth in sales worldwide. Managers may benefit from a mutual exchange of knowledge and competences between acquired firms and MNEs. Policy makers should encourage FDI attraction strategies. This study for the first time analyses the post-acquisition innovation performance of all the Italian acquired mid-sized firms.