Temporal Dynamics in Acquisition Behavior: The Effects of Activity Load on Strategic Momentum

Thomas Keil*, Yuval Deutsch, Tomi Laamanen, Markku Maula

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

Abstract

Momentum theory suggests that acquisition experience leads to acquisition momentum in the form of a higher likelihood of subsequent acquisitions of the same type. However, this argument has been challenged theoretically and empirically. We reconcile conflicting predictions and findings of prior research and extend momentum theory by incorporating activity load as a novel causal mechanism to both replicate the base finding and explain deviations from it. We find that a high activity load due to increased acquisition activity acts as a counterforce to momentum, decreasing the likelihood of subsequent acquisitions of the same type. Moreover, we also find that the interplay of routines, cognitive frames, and activity load causes companies to alternate between different types of acquisitions - from small to large and from large to small - as management engages in attention modulation to preserve momentum. Taken together, our arguments and findings contribute to an improved understanding of temporal patterns of acquisition behaviour.

Original languageEnglish
Number of pages44
JournalJournal of Management Studies
DOIs
Publication statusE-pub ahead of print - 23 Jun 2022
MoE publication typeA1 Journal article-refereed

Keywords

  • activity load
  • Mergers and acquisitions (M&A)
  • momentum theory
  • positional momentum
  • repetitive momentum
  • temporal dynamics
  • EXECUTIVE JOB DEMANDS
  • ATTENTION-BASED VIEW
  • ALLIANCE INITIATIVES
  • INFORMATION OVERLOAD
  • CEO OVERCONFIDENCE
  • DECISION-MAKING
  • COGNITIVE LOAD
  • PERFORMANCE
  • EXPERIENCE
  • FIRMS

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