Killer Acquisitions

• 成果类型: Article
• 署名作者: Cunningham, Colleen; Ederer, Florian; Ma, Song
• 署名单位: University of London; London Business School; Yale University
• 刊物名称: JOURNAL OF POLITICAL ECONOMY
• ISSN/ISSBN: 0022-3808
• DOI: 10.1086/712506
• 发表日期: 2021
• 页码: 649-702
• 关键词: research-and-development; Medicare Part D; drug development; Price controls; market-size; INNOVATION; entry; mergers; COMPETITION; incentives

摘要

This paper argues that incumbent firms may acquire innovative targets solely to discontinue the target's innovation projects and preempt future competition. We call such acquisitions killer acquisitions. We develop a model illustrating this phenomenon. Using pharmaceutical industry data, we show that acquired drug projects are less likely to be developed when they overlap with the acquirer's existing product portfolio, especially when the acquirer's market power is large because of weak competition or distant patent expiration. Conservative estimates indicate that 5.3%-7.4% of acquisitions in our sample are killer acquisitions. These acquisitions disproportionately occur just below thresholds for antitrust scrutiny.