"Flexibility or Vulnerability? Real Options Theory and Acquisition Motive Diversity in Distressed Acquiring Firms" Examining the Performance Implications of Strategic Motive Diversity in High-Tech M&A
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2025-06-23
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en
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Some acquisitions are more risky than others, depending on what acquisition motive is pursued. However, less is known about the impact of multiple acquisition motives on the post-acquisition performance. This study argues that when firms pursue diverse motives, they create different strategic paths that provide future opportunities. Extending on real options theory, this study conceptualized the diversity of acquisition motives as a mechanism for creating a portfolio of options that enhances a firm’s strategic flexibility and adaptability in uncertainty. The creation of options are specifically beneficial for firms in distress, due to increased uncertainty and need for strategic flexibility. Through a panel data approach of acquisitions deals involving firms from the high-tech industry in the period of 2008 to 2020, the data is analyzed using time fixed-effects regression. The findings show no significant relationship between motive diversity and post-acquisition performance and no significant moderation effect of firm distress. However, while distressed firms theoretically expected to benefit from motive diversity, the realization of an increased performance could be due to other factors.
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Faculteit der Managementwetenschappen