Fons-Rosen, Christian; Roldan-Blanco, Pau; Schmitz, Tom - 2022 - This version: December 9, 2022
startups just to "kill" their ideas, and acquisitions can erode incumbents' own innovation incentives. Our paper aims to assess … the net effect of these forces. To do so, we build an endogenous growth model with heterogeneous firms and acquisitions …. Our calibrated model implies that acquisitions raise the startup rate, but lower incumbents' own innovation as well as the …