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From Facebook adding Oculus immersive technology to Amazon's pending purchase of iRobot, start-up acquisitions are a common occurrence. Assistant Professor of Finance Zack Liu at the Bauer College of Business at the University of Houston says these acquisitions seem like good financial decisions, but are they good for innovation?
“In general, companies try to acquire start-ups that have high potential with the hope that they will continue to successfully innovate even after they are acquired.”
“However, new research finds that the acquisition itself can have a negative impact on the overall innovation potential and productivity of the inventors that work at these start-ups.”
“Since the discovery and development of new ideas and products is critical for a thriving economy, businesses, regulators, and legislators need to ensure that the incentives for future research and innovation are not impaired by mergers and acquisitions.”
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