Understanding Acquisition Performance: The Role of Transfer Effects

Drawing on work from transfer theory at the individual unit of analysis, this study examines positive and negative transfer effects in organization acquisitions. Data from 43 organizations reveal that, consistent with theories on positive transfer of industry knowledge, similar acquisitions are positively related to acquisition performance. In addition, hypotheses on the negative transfer effects of past acquisition knowledge are borne out: relative to first acquisitions, second acquisitions are found to be negatively associated with acquisition performance. These findings indicate that the application of transfer theory to strategic issues at the organization unit of analysis may provide new insights.

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