Start-up acquisitions, venture capital and innovation: A comparative study of Google, Apple, Facebook, Amazon and Microsoft

Klaus Gugler; Florian Szücs; Ulrich Wohak

doi:10.1016/j.ijindorg.2025.103148

Start-up acquisitions, venture capital and innovation: A comparative study of Google, Apple, Facebook, Amazon and Microsoft

Klaus Gugler
, Florian Szücs
, Ulrich Wohak

Vienna University of Economics and Business

Research output: Contribution to journal › Article › peer-review

Abstract (may include machine translation)

We evaluate the impact of big-tech acquisitions on the incentives for venture capital (VC) investment and innovation. Using data on several hundred acquisitions by Google, Apple, Facebook, Amazon and Microsoft (GAFAM), we study the evolution of VC investment and patenting in affected technology fields relative to control groups. The results show a clear negative impact on VC investment, while the effect on innovation depends on the acquirer and period. Over time, the treatment effects on both outcomes improve, as GAFAM firms' product and tech-portfolios become more similar. Yet, around 14% of acquisitions impact both metrics negatively.

Original language	English
Article number	103148
Number of pages	20
Journal	International Journal of Industrial Organization
Volume	99
DOIs	https://doi.org/10.1016/j.ijindorg.2025.103148
State	Published - Mar 2025
Externally published	Yes

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 9 Industry, Innovation, and Infrastructure

Keywords

Big-tech
Innovation
M&A
Venture capital

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10.1016/j.ijindorg.2025.103148License: CC BY

Wohak-Ulrich_2025-03Publisher version, 2.05 MBLicense: CC BY

Cite this

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title = "Start-up acquisitions, venture capital and innovation: A comparative study of Google, Apple, Facebook, Amazon and Microsoft",

abstract = "We evaluate the impact of big-tech acquisitions on the incentives for venture capital (VC) investment and innovation. Using data on several hundred acquisitions by Google, Apple, Facebook, Amazon and Microsoft (GAFAM), we study the evolution of VC investment and patenting in affected technology fields relative to control groups. The results show a clear negative impact on VC investment, while the effect on innovation depends on the acquirer and period. Over time, the treatment effects on both outcomes improve, as GAFAM firms' product and tech-portfolios become more similar. Yet, around 14\% of acquisitions impact both metrics negatively.",

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AB - We evaluate the impact of big-tech acquisitions on the incentives for venture capital (VC) investment and innovation. Using data on several hundred acquisitions by Google, Apple, Facebook, Amazon and Microsoft (GAFAM), we study the evolution of VC investment and patenting in affected technology fields relative to control groups. The results show a clear negative impact on VC investment, while the effect on innovation depends on the acquirer and period. Over time, the treatment effects on both outcomes improve, as GAFAM firms' product and tech-portfolios become more similar. Yet, around 14% of acquisitions impact both metrics negatively.

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Start-up acquisitions, venture capital and innovation: A comparative study of Google, Apple, Facebook, Amazon and Microsoft

Abstract (may include machine translation)

UN SDGs

Keywords

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