Nevine El-Mallakh: Business Groups and Knowledge

Seminars - Applied Microeconomics
NEVINE ELMALLAKH, Universita' Bocconi
12:30 - 13:45
Alberto Alesina Seminar Room 5.e4.sr04, floor 5, Via Roentgen 1
Foto istituzionale Cameron Peng



This paper studies how business groups (BGs) acquire and organize innovation within their hierarchy. Using a novel worldwide firm citation network database paired with their BG affiliation, if any, we document three facts. First, innovative standalone firms are more likely to become part of a BG. Second, high positions in groups' hierarchy are associated with a high patenting activity. Third, innovative affiliates are more likely to be moved up in the group hierarchy. We disentangle BGs' defensive vs expansionary acquisition behaviours depending on their respective technological spaces. BGs internalize innovation by acquiring standalone firms on an upward patenting trend in the same technological space in a defensive behavior. Moreover, BGs acquire other BGs' affiliates with relatively less patent portfolio overlap in terms of technological scope, then foster innovation post-acquisition consistently with an expansionary behaviour.


Paper joint with Carlo Altomonte (Bocconi University) and Tommaso Sonno (University of Bologna).


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