Date: Jan.3, 2020

Time: 10:00-11:30

Speaker: Mark Liu

Venue: Room 418, School of Economics, Yuquan Campus

【Speaker Intro】

Mark Liu is Associate Professor of Finance with tenure at the Gatton College of Business & Economics, University of Kentucky. He obtained his master degree in finance from University of Western Ontario in 1998 and Ph.D. in finance from Boston College in 2004. His research interest is in theoretical and empirical corporate finance (IPOs, Mergers & Acquisitions, Corporate Governance, Financial Analysts, Dividend Policy, and Corporate Restructuring).

Dr. Liu has published his research in top finance journals such as Journal of Financial Economics, Journal of Financial and Quantitative Analysis, Journal of Banking and Finance, and Journal of Corporate Finance.

【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.