Moving motives: How past and present strategy influence the market.

ABSTRACT: We investigate the market's reactions to serial acquirers that switch strategy. We collect data on 204 serial acquirers in four high tech industries, and use March's explore-exploit framework, to classify these firms' 1,415 acquisitions. We then distinguish, for example, exploration-based acquisitions, conducted after a series of exploitation-based acquisitions. Our results suggest that the market takes a portfolio perspective when reacting to an acquisition. In support of the ambidexterity literature, we show that the market responds positively to a switch from one type of strategy to another. Zooming in on the direction of the shift, we find that the market responds more positively to a switch towards exploration after exploitation, compared with the alternative. In so doing, we contribu

SUBMITTER: Aalbers RHL 

PROVIDER: S-EPMC8654236 | biostudies-literature | 2021

REPOSITORIES: biostudies-literature