Firm Organization, Technology Adoption and Merger and Acquisition Activity

University Of Maryland, College Park, College Park MD

Investigators

Abstract

This research focuses on the adoption of new process technologies by firms. In particular, it looks at how the consequences of technology adoption are related to firms' organizational structures and the stages of the industry lifecycles. Existing evidence on industry evolution shows that industries go through one or more major episodes of restructuring during their lifecycles. The evidence suggests that changes in the number of firms in an industry often occur at times when new technologies are introduced that change the competitive advantage among firms. We will identify how the firm's organizational structure affects its ability to exploit industry transitions by successfully adopting new technologies and acquiring capacity through mergers and acquisitions in the restructuring of industries. This project will help understand how new technologies diffuse through the population of firms, and how this diffusion affects the size and organization of firms and their incentives to merge or acquire other firms. Understanding how the process of diffusion occurs will help statisticians project future productivity increases and help in the evaluation of government policies to monitor increases in productivity.