Date: 3^rd January, 2020

Time: 10:00 – 11:30 a.m.

Venue: Room 418, Economic School, Yuquan Campus, Zhejiang University.

【Speaker Introduction】：Mark Liu is currently a tenured professor of finance at the Gatton College of Business & Economics, University of Kentucky in the United States. He has published more than 10 academic papers in top international journals such as Journal of Financial Economics, Journal of Financial and Quantitative Analysis, Journal of Banking and Finance, Journal of Corporate Finance.

【Lecture Abstract】： Fundamental innovation usually involves huge upfront costs, but the benefits are spread across various sectors of the economy. Given the large costs and limited appropriability of the benefits associated with the innovation, individual firms underinvest in these innovations relative to the socially optimal level. We find that mergers and acquisitions (M&As) can internalize the positive externalities by merging firms from both the user industries and the producer industries of an innovation. Using the US patent citation dataset, we define the user and producer relationship between each pair of industries and between each pair of industry and technological class. We then show that after a merger between an innovation user and an innovation producer, the quantity of innovation output increases, and the increase is driven by targeted technological classes.