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Simulation of Technology Sourcing Overseas Post-Merger Behaviors in a Global Game Model

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Abstract

The abilities to efficiently identify potential innovation profits and form an optimal post-merger strategy are important in evaluating overseas merger and acquisition (M&A) performances. The paper uses a global game with asymmetric payoff structure and multi-agent simulation method to analyze the optimal overseas post-merger strategy. We model three stages of the M&A processes: merger decision stage, post-merger integration stage, and technology innovation after M&A, to analyze how different resource similarity and resource complementarity of the two companies influence the degree of optimal post-merger integration and target autonomy as well as technology innovation profit after M&A. The agent-based simulation shows that in overseas M&As, resource similarity has a positive relation with integration and a negative relation with target autonomy; however, resource complementarity has the opposite effect. The negative interaction effect between resource similarity and complementarity will decrease the degree of integration. In high resource similarity and low resource complementarity M&As, a high integration degree and low target autonomy will maximize innovation profit, while for high resource similarity and high resource complementarity M&As, a medium integration degree and target autonomy is best for innovation profit. For low resource similarity and high resource complementarity M&As, a low integration degree and high target autonomy will be the best post-merger strategy. Model outputs are robust to variations of the parameters.

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... Therefore, enterprises urgently seek ways to achieve transformation and grow innovatively. Mergers and acquisitions (M&As) have been proved efficient in helping enterprises to obtain resources, to expand their market share, and to make more profits [1][2][3]. According before developing the hypotheses; Section 3 describes the data and methodology; Section 4 presents and discusses the empirical results as well as the robustness test; Section 5 contains further discussion about the mechanisms through which digital finance influences M&As; and, finally, Section 6 concludes the research and proposes possible recommendations for the government and managers. ...
... Regional heterogeneity test results.Note: (1) ***, **, and * represent significant at 1%, 5%, and 10% levels respectively.(2) The values in parentheses are Z values.https://doi.org/10.1371/journal.pone.0289845.t009 ...
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Sayan Chatterjee is Professor of Policy at the Weatherhead School of Management and a Batten Fellow of the Darden School. He is currently studying business model innovation, competitive strategies and M&A with a focus on merger integration. Prof. Chatterjee serves on the editorial board of the leading journals in Strategy and has published numerous articles and books. He has consulted with many companies ranging from Fortune 500 to start-ups. Area of Expertise: Competitive Strategy, Diversification Strategy, Innovation, Mergers and Acquisition, Joint Ventures. sayan.chatterjee@case.edu
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