This paper addresses the key determinants of merger failure, in particular the role of innovation (post-merger … introduce a model of process innovation where merged firms exibit intra-merger spillover of knowledge under different market … section we test the model implications for merger failure for M&A data from the US biotechnology industry in the 90s. We find …

a reduction in welfare of 6.3%, while a merger between Vermillion and Novartis would result in a welfare loss of 1 …