Abstract
M&A plays an increasingly important role in the contemporary business environment. Companies usually conduct M&A to pursue complementarity from other companies for preserving and/or extending their competitive advantages. For the given bidder company, a critical first step to the success of M&A activities is the appropriate selection of target companies. However, existing studies on M&A prediction incur several limitations, such as the exclusion of technological variables in M&A prediction models and the omission of the profile of the respective bidder company and its compatibility with candidate target companies. In response to these limitations, we propose an M&A prediction technique which not only encompasses technological variables derived from patent analysis as prediction indictors but also takes into account the profiles of both bidder and candidate target companies when building an M&A prediction model. We collect a set of real-world M&A cases to evaluate the proposed technique. The evaluation results are encouraging and will serve as a basis for future studies.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Ali-Yrkkö, J., Hyytinen, A., Pajarinen, M.: Does Patenting Increase the Probability of Being Acquired? Evidence from Cross-border and Domestic Acquisitions. Applied Financial Economics 14(1), 1007–1017 (2005)
An, S., He, Y., Zhao, Z., Sun, J.: Measurement of Merger and Acquisition Performance Based on Artificial Neural Network. In: 5th IEEE International Conference on Cognitive Informatics, pp. 502–506. IEEE Press, New York (2006)
Breitzman, A., Thomas, P.: Using Patent Citation Analysis to Target/Value M&A Candidates. Research-Technology Management 45(5), 28–36 (2002)
Breitzman, A., Thomas, P., Cheney, M.: Technological Powerhouse or Diluted Competence: Techniques for Assessing Mergers via Patent Analysis. R&D Management 32(1), 1–10 (2002)
Deng, Z., Lev, B., Narin, F.: Science and Technology as Predictors of Stock Performance. Financial Analysts Journal 55(3), 20–32 (1999)
Gugler, K., Konrad, K.A.: Merger Target Selection and Financial Structure (July 2002), http://homepage.univie.ac.at/klaus.gugler/public/rio.pdf
Gupta, D., Gerchak, Y.: Quantifying Operational Synergies in a Merger/Acquisition. Management Science 48(4), 517–533 (2002)
Harhoff, D., Scherer, F.M., Vopel, K.: Citations, Family Size, Opposition and the Value of Patent Rights. Research Policy 32(8), 1343–1363 (2003)
James, A.D., Georghiou, L., Metcalfe, J.S.: Integrating Technology into Merger and Acquisition Decision Making. Technovation 18(8), 563–573 (1998)
Meador, A.L., Church, P.H., Rayburn, L.G.: Development of Prediction Models for Horizontal and Vertical Mergers. Journal of Financial and Strategic Decisions 9(1), 11–23 (1996)
Mitchell, T.: Machine Learning. McGraw Hill, New York (1997)
Narin, F.: Technology Indicators and Corporate Strategy. Review of Business 14(3), 19–23 (1993)
Pasiouras, F., Gaganis, C.: Financial Characteristics of Banks Involved in Acquisitions: Evidence from Asia. Applied Financial Economics 17(4), 329–341 (2007)
Pegels, C.C., Thirumuthy, M.V.: The Impact of Technology Strategy on Firm Performance. IEEE Transactions on Engineering Management 43(3), 246–249 (1996)
Ragothaman, S., Naik, B., Ramakrishnan, K.: Predicting Corporate Acquisitions: An Application of Uncertain Reasoning Rule Induction. Information Systems Frontiers 5(4), 401–412 (2003)
Sirower, M.L.: The Synergy Trap. Free Press, New York (1997)
Song, X., Chu, Y.: A Study on Financial Strategy for Determining the Target Enterprise of Merger and Acquisition. Journal of Modern Accounting and Auditing 2(4), 55–60 (2006)
Teichert, T., Ernst, H.: Assessment for R&D Collaboration by Patent Data. In: Portland International Conference on Technology and Innovation Management, pp. 420–428. IEEE Press, New York (1999)
Trautwein, F.: Merger Motives and Merger Prescription. Strategic Management Journal 11, 283–295 (1990)
Webber, J.A., Dholakia, U.M.: Including Marketing Synergy in Acquisition Analysis: A Step-Wise Approach. Industrial Marketing Management 29(2), 157–177 (2000)
World Intellectual Property Organization, International Patent Classification (8th ed.) (2006), http://www.wipo.int/export/sites/www/classifications/ipc/en/guide/guide_ipc8.pdf
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2009 Springer-Verlag Berlin Heidelberg
About this paper
Cite this paper
Wei, CP., Jiang, YS., Yang, CS. (2009). Patent Analysis for Supporting Merger and Acquisition (M&A) Prediction: A Data Mining Approach. In: Weinhardt, C., Luckner, S., Stößer, J. (eds) Designing E-Business Systems. Markets, Services, and Networks. WEB 2008. Lecture Notes in Business Information Processing, vol 22. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-01256-3_16
Download citation
DOI: https://doi.org/10.1007/978-3-642-01256-3_16
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-642-01255-6
Online ISBN: 978-3-642-01256-3
eBook Packages: Computer ScienceComputer Science (R0)