How Do Mutual Dependence and Power Imbalance Condition the Effects of Technological Similarity on Post-Acquisition Innovation Performance Over Time?

This study investigates how mutual dependence and power imbalance, which have been differentiated by the recent studies adopting the theoretical lens of resource dependence theory (RDT) as two distinct forms of interdependence, change the effect of technological similarity between the acquiring firm and target firm on post-acquisition innovation across times. The analysis of a panel data on merger and acquisitions (M&As) undertaken by the US firms reveals that in the short-run mutual dependence strengthens the effect of technological similarity on post-acquisition innovation, whereas power imbalance weakens it. However, the effect of mutual dependence persists over time, while that of power imbalance declines over time. These findings extend the RDT to the context of technological acquisition and innovation and offer important implications for research and practice.