The effect of R&D spending on a firm’s profitability and market value in M&As: evidence from Nasdaq listed companies

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annif.suggestionscorporate acquisitions|enterprises|corporate strategies|technology|valuation|market value|technology companies|profitability|synergy|finance|enen
annif.suggestionscorporate acquisitions|enterprises|corporate strategies|technology|valuation|market value|technology companies|profitability|synergy|finance|enen
annif.suggestions.linkshttp://www.yso.fi/onto/yso/p4382|http://www.yso.fi/onto/yso/p3128|http://www.yso.fi/onto/yso/p5156|http://www.yso.fi/onto/yso/p2339|http://www.yso.fi/onto/yso/p15139|http://www.yso.fi/onto/yso/p22006|http://www.yso.fi/onto/yso/p11237|http://www.yso.fi/onto/yso/p4257|http://www.yso.fi/onto/yso/p22966|http://www.yso.fi/onto/yso/p1406en
annif.suggestions.linkshttp://www.yso.fi/onto/yso/p4382|http://www.yso.fi/onto/yso/p3128|http://www.yso.fi/onto/yso/p5156|http://www.yso.fi/onto/yso/p2339|http://www.yso.fi/onto/yso/p15139|http://www.yso.fi/onto/yso/p22006|http://www.yso.fi/onto/yso/p11237|http://www.yso.fi/onto/yso/p4257|http://www.yso.fi/onto/yso/p22966|http://www.yso.fi/onto/yso/p1406en
dc.contributor.authorKoski, Elisa
dc.contributor.facultyfi=Laskentatoimen ja rahoituksen yksikkö|en=School of Accounting and Finance|-
dc.contributor.organizationfi=Vaasan yliopisto|en=University of Vaasa|
dc.date.accessioned2021-10-28T05:55:55Z
dc.date.accessioned2025-06-25T17:07:54Z
dc.date.available2021-10-28T05:55:55Z
dc.date.issued2021-09-03
dc.description.abstractMergers and acquisitions have been part of companies’ strategies to improve their profitability and market valuation. The purpose of this study is to examine the effects of R&D expenditures on the acquirer’s profitability and stock market valuation in two different cases: when the acquiring firm is a technological company and a non-technological company. The target company for both is a technological company. Firstly, it is hypothesized that R&Ds of the acquirer enhance the stock market valuation more for technology acquirers than for non-technological counterparts. The comparison of stock market valuations is performed in the year when the company acquires a technological company. Secondly, this study shows how technological and non-technology acquirers can convert R&D spending into future profitability within one year after the M&A being completed. The sample consist of 186 technological M&As and 50 M&As where the acquirer is a non-technological company. The chosen acquirers are Nasdaq listed companies which completed a merger or acquisition between 2010 and 2017. The methodology used is OLS regression analysis. The key findings of the study reflect that in the year when the M&A is completed there is no correlation of R&D expenditures with stock price when a technological or a non-technological company acquires a technological company. The other important finding is that in the long run a technological company can convert R&D spending into future profitability more efficiently than a non-technological company by acquiring a technological company. Technological M&As have more potential to realize synergies after the M&A. During the year of the M&A R&D spending increase in both companies, which means that during the year of acquisition companies cannot utilize the synergies created from the acquisition of the technological company. Keywords: mergers and acquisitions, R&D, profitability, stock market valuation-
dc.format.bitstreamtrue
dc.format.contentfi=kokoteksti|en=fulltext|-
dc.format.extent56-
dc.identifier.olddbid14831
dc.identifier.oldhandle10024/13143
dc.identifier.urihttps://osuva.uwasa.fi/handle/11111/10787
dc.identifier.urnURN:NBN:fi-fe2021090345084-
dc.language.isoeng-
dc.rightsCC BY-NC 4.0-
dc.source.identifierhttps://osuva.uwasa.fi/handle/10024/13143
dc.subject.degreeprogrammefi=Laskentatoimen ja tilintarkastuksen maisteriohjelma|en=Master's Programme in Accounting and Auditing|-
dc.subject.disciplinefi=Laskentatoimi ja rahoitus|en=Accounting and Finance|-
dc.subject.ysomarket value-
dc.subject.ysoprofitability-
dc.titleThe effect of R&D spending on a firm’s profitability and market value in M&As: evidence from Nasdaq listed companies-
dc.type.ontasotfi=Pro gradu -tutkielma|en=Master's thesis|sv=Pro gradu -avhandling|-

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