Network Positions and the Probability of Being Acquired: An Empirical Analysis in the Biopharmaceutical Industry

Mazzola, E., Perrone, G. & Kamuriwo, D. S. (2016). Network Positions and the Probability of Being Acquired: An Empirical Analysis in the Biopharmaceutical Industry. British Journal of Management, 27(3), pp. 516-533. doi: 10.1111/1467-8551.12174

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Abstract

This paper examines the relationship between the firm's direct ties, its inter-firm network prominence and its likelihood of being acquired. The authors argue that firm's direct ties and prominence enhance the firm's visibility and signal its quality – and thus foster the firm's likelihood of being acquired. However, higher levels of direct ties and prominence, by providing access to resources and the firm's status, respectively, increase the firm's ability to remain independent and thus reduce its likelihood of being acquired. Thus, the authors posit the overall relation as an inverted U-shaped. Furthermore, they show that, for firms that undergo an initial public offering, the aforementioned relation becomes much weaker. The hypotheses are empirically tested in the biopharmaceutical industry and important theoretical and managerial implications are discussed.

Item Type: Article
Additional Information: This is the peer reviewed version of the following article: Mazzola, E., Perrone, G. and Kamuriwo, D. S. (2016), Network Positions and the Probability of Being Acquired: An Empirical Analysis in the Biopharmaceutical Industry. Brit J Manage, 27: 516–533., which has been published in final form at http://dx.doi.org/10.1111/1467-8551.12174. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.
Uncontrolled Keywords: signaling theory, network theory, social capital, acquisition, biopharmaceutical
Subjects: H Social Sciences > HD Industries. Land use. Labor
Divisions: Cass Business School > Faculty of Management
URI: http://openaccess.city.ac.uk/id/eprint/15724

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