Speaker: Andrea Contigiani, Fisher College of Business, Ohio State University
"Effective learning is a critical capability in today’s rapidly changing business environment. We explorethe role of one learning approach – experimentation -- in the context of corporate strategy. Wecategorize acquisitions into sequential and non-sequential. Based on real option theory, we viewsequential acquisitions – acquisitions preceded by option-type investments such as alliances, corporateventure capital, or other minority investments – as a form of experimental corporate strategy. Toempirically explore this phenomenon, we construct a novel dataset of US-based publicly-listed hightechnologyfirms in period 2000-2018, combining data from COMPUSTAT, SDC Platinum, and CRSP. First,we quantify the frequency of experimental corporate strategy across firms and sectors. Second, weanalyze the factors driving the propensity to choose this approach vis-à-vis the standard non-sequentialapproach. Finally, we shed light on its performance implications by examining the market reaction toexperimental acquisitions using an event-study methodology."