Abstract
The aim of this paper is to examine how an acquirer’s diversification strategy shapes the multiple dimensions of inventive activity. Differing from prior research, we use a set of indicators to investigate this phenomenon. In particular, we consider three different but complementary dimensions of inventive quality: technological impact, originality of the synthesized knowledge streams, and generality of applicability across different technological domains. The results obtained using a quasi-experimental approach show that diversification via acquisitions has a negative effect on post-acquisition technological impact. However, firms that have diversified outperform those firms that have not. Last, the acquirer’s originality and generality increase after the merger and acquisition transaction, evidencing that the inventive activity benefited from the diversification strategy.