Inter-Firm Inventor Collaboration and Path-Breaking Innovation: Evidence from Inventor Teams Post-Merger

Kai Li and Jin Wang

Using a large and unique data set tracking inventors’ career paths following mergers and acquisitions over the period 1981–2012, we show that collaboration between acquirer and target inventors post-merger is associated with more path-breaking patents than those filed by either acquirer or target inventor-only teams. We further show that such collaboration is more important in improving acquirers’ innovation capabilities than hiring target inventors and knowledge spillovers. Finally, we show that recombining tacit knowledge embodied in the human capital of acquirer and target inventors is likely the mechanism. We conclude that inter-firm inventor collaboration is one key means for achieving synergies.