Acquisitive Growth Strategy and Relative R&D Intensity: The Effects of Leverage, Diversification, and Size.

Acquisitive growth strategies absorb managerial energy and lead to increased leverage, greater diversification and larger size. Because of these effects, managers tend to emphasize short-term performance and become risk averse. Analysis of 191 mergers showed that acquisitive growth, leverage, diversification and size were negatively related to relative R&D intensity.