Prof. Exequiel Hernandez (Olin Business School)

Programm

• Datum: 11.6.2012
  Zeit: 16:00-17:30 Uhr
  Ort: Ludwigstraße 28, Raum 305 VG

Social Capital for Sale: M&As as Vehicles to Access and Compete for Network Position

Research has shown that  occupying certain structural positions in an interfirm network can confer competitive advantage, but has overlooked the possibility that acquisitions can dramatically alter the the network by recombining the nodes into new structural arrangements. The work on mergers & acquisitions has also ignored this possibility, and focused primarily on synergies between internally owned resources of the combining firms instead of those that may arise from changes in the network position of the merged entity. We address these gaps in the literature by considering how network potential–the expected competitive benefits that arise from changes in the structure of the network resulting from an acquisition–affect the decision of whom to acquire. We propose that, after controlling for the internal synergies discussed in prior research, acquirers are more likely to purchase targets that put the combined entity in a structural position that either (a) improves upon the position occupied by the acquirer before the combination or (b) diminishes the position occupied by a competitor of the acquirer. We determine the competitive effects of acquisition-induced changes in structural position by how they affect the ability of the firm or its competitors to access resources that increase revenues, reduce costs, or both. This study contributes to our understanding of how firms compete through network structure, and how networks affect corporate strategy decisions.