Research Lines Business acquisitions and innovation

Research line C: Business acquisitions and innovation

The focus on changes of ownership in businesses is a recent development. In the 1980s of the last century, family business researchers turned their attention to the question of changes of business ownership, partly due to the expectation that demographic factors would cause many thousands of businesses to undergo a change in ownership in the years to come. Business acquisitions - of which there are an estimated 11,000 to 15,000 per year - are of much greater importance to the Dutch economy than start-ups, even though start-ups outnumber acquisitions by a factor of eight. Research indicates that companies that are taken over by new owners generate three times more jobs than start-ups. In addition to employment opportunities, companies under new ownership also contribute more in terms of innovation and productivity than start-ups. Furthermore, their chances of survival are greater and their sales and profits are also higher than start-ups.
It is crucial that there is support for the businesspeople involved in take-overs and acquisitions because in addition to negotiations, organizational questions and financing, fiscal and legal matters also play an important role. Previous research into advice for SMEs showed that advisors are not sufficiently equipped to provide guidance through the entire process of a business take-over. Dutch and European research studies have shown that ‘knowledge and skills’, ‘finance’ and ‘organizational experiences of change’ are the main stumbling blocks during business take-overs. Due to the lack of knowledge and skills, an estimated 10-40% of business acquisitions inadvertently lead to liquidation. Furthermore, unsuccessful business acquisitions lead to an unknown number of companies continuing to trade more or less undesired. The FAI research group also researches the factors that determine the success or failure of acquisitions and take-overs; this involves cooperation with other universities at home and abroad.

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