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Entrepreneurial Human Capital, Complementary Assets, and Takeover Probability


Braun, Thorsten V.; Krispin, Sebastian, and Erik E. Lehmann

Unternehmensführung und Organisation Working Paper No. 03-10, 2010-04-22

Abstract: Although acquisitions of high tech entrepreneurial firms are of great popularity, the limited empirical evidence shows that these acquisitions often lead to dismal results in that a large number of acquired inventors leave the company after the acquisition and those that remain exhibit poor performance. This study tries to explain this phenomenon and adds additional empirical results and explanations which are based on the seminal work of Grossman, Hart, and Moore. Using a hand collected dataset of all German IPOs from 1997 until 2006 we show that the takeover probability of young and high tech firms significantly decreases with the amount of patents as a measure of intangible and complementary assets owned by the owner-manager.

Presented at: 36th Annual Conference of the EARIE 2009 Ljubljana/Slovenia; X. Symposium zur ökonomischen Analyse der Unternehmung der GEABA 2009 Vallendar/Germany.

Forthcoming in: The Journal of Technology Transfer.

About the Authors: Thorsten V. Braun and Erik E. Lehmann, Chair of Management and Organization, University of Augsburg, Germany. Sebastian Krispin, Chair of Economics of the Information Society, University of Augsburg, Germany.

Availability: SSRN (click to access)