Qingqing Chen

We explore a form of post-acquisition integration where inventors from the target and acquiring organizations share and integrate technological and organizational knowledge while performing joint research and development. We refer to this phenomenon as “inventor commingling.” Grounded in the knowledge-based view, we posit that commingling enhances the target firm’s innovation performance by enabling the transfer of the acquirer’s organizational knowledge while preserving the target’s existing knowledge base. We explore how commingling differs from structural integration and how the two forms of integration can be combined for post-acquisition management. We posit that commingling diminishes the negative effects of structural integration, while structural integration may enhance the efficacy of commingling. Since organizational knowledge is firm-specific and cumulative, commingling efficacy should increase with acquirer commingling inventors’ tenure. To test these predictions, we assemble a large sample of acquisitions to study the effect of these forms of post-acquisition integration on acquired entity innovation outcomes. Our results support a positive commingling innovation effect, which is more pronounced under structural integration. A high degree of commingling can mitigate the negative effects of post-acquisition structural integration documented in the literature. We use direct flights between the acquisition party locations as an instrument to address the potentially endogenous process of inventor commingling. We find consistent results. Our study raises the possibility of inventor commingling as a distinct form of post-acquisition integration, which holds the potential of effectively transferring organizational knowledge and supporting post-acquisition innovation output, while sidestepping the classic post-acquisition integration-autonomy tradeoff.…Read More