Analysis of the relationship between R&D Investment and Merger and Acquisition Transactions

The thesis has the objective of explore the relationship between innovation and corporate takeovers, examining how strategic acquisitions impact innovation within the acquiror and target firms. To introduce the study, in the first section is performed an analysis of what M&A are highlighting the main drivers of corporate takeovers and what are the strategic reasons that influence management behaviour. In the second section is performed an analysis of how and why firms innovate, specifically in the high-tech market, a review of the literature is presented to support the study. The third section contains the effective work, some of the literature’s suggestions are tested, specifically the link between source of innovation (namely R&D investment) and the market of corporate takeover. To deliver what described before, an empirical analysis on a sample of M&A deals is presented to refuse or confirm the hypothesis presented. The empirical analysis is made of multiple-factor regression, also known as multiple regression analysis, is a statistical technique used to analyse the relationship between a dependent variable and two or more independent variables. It is used to predict the behaviour of the dependent factor through a linear equation made of the independent factors and their coefficient. In the last section the results are commented and the conclusion of the analysis is presented. However, the analysis results are not perfect because of the multitude of factors that could be take in consideration, more other models and methods can be introduced in the analysis to improve it.