The impact of biotech acquisitions on inventor productivity

This study explores the impact of acquisitions on the productivity and retention of inventors, which is critical for shaping effective corporate acquisition strategies and innovation management. We analyze the patenting activity of 15,318 inventors involved in 1,375 acquisitions of biotech firms from 1990 to 2010. Employing a staggered difference-in-differences approach, our findings reveal a 13.5% increase in inventor turnover and a 35% decrease in citation-weighted patent productivity subsequent to acquisitions. The decline in productivity is particularly pronounced among the remaining inventors, especially those whose expertise closely matches the technological focus of the acquired company. Conversely, experienced inventors with skills that complement the acquiring firm's R&D focus tend to maintain or even enhance their productivity post-acquisition. These results illuminate the varied effects of acquisitions on inventor productivity and emphasize the importance of strategic alignment in planning acquisitions.