Fons-Rosen, Christian; Roldan-Blanco, Pau; Schmitz, Tom - 2022 - This version: December 9, 2022
Innovative startups are frequently acquired by large incumbent firms. On the one hand, these acquisitions provide an … 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 …