Knowledge resources and the acquisition of spinouts.

In high-technology industries, employee spinouts have increasingly been identified as attractive targets for acquisitions. Yet employee spinouts may originate from different knowledge contexts. This study adopts a resource base perspective to examine the impact of both the knowledge heritage and the product strategy of spinouts originating from different contexts (i.e. from the same industry or from a related downstream industry) on the potential to be acquired by firms in the same industry or in related industries. Our findings, based on data from the semiconductor industry and its related downstream industries, show that spinouts from firms in a focal industry represent appealing targets for a broad range of buyer firms from within the focal industry or from related, downstream industries, independent of their product strategy at entry. By contrast, spinouts from downstream, user industries that enter into an upstream industry, tend to appeal to a more limited set of buyers. Our study suggests that managers and academics should consider the acquisition of spinouts whose founders have origins in related industries as a channel to access critical knowledge from upstream or downstream contexts. Yet because many of the critical knowledge resources that spinouts possess are embodied in their founders, such acquisitions also require careful management of personnel decisions post-acquisition. [ABSTRACT FROM AUTHOR]