Why do we need a theory and metrics of technology upgrading?

This paper discusses why we need theory and metrics of technology upgrading. It critically reviews the existing approaches to technology upgrading and motivates build-up of theoretically relevant but empirically grounded middle level conceptual and statistical framework which could illuminate a type of challenges relevant for economies at different income levels. It conceptualizes technology upgrading as three dimensional processes composed of intensity and different types of technology upgrading through various types of innovation and technology activities; broadening of technology upgrading through different forms of technology and knowledge diversification, and interaction with global economy through knowledge import, adoption and exchange. We consider this to be necessary first step towards theory and metrics of technology upgrading and generation of more relevant composite indicator of technology upgrading

Relative equity market valuation conditions and acquirers’ gains

We examine whether the relative equity market valuation conditions (EMVCs) in the merging firms countries help acquirers’ managers to time the announcements of domestic and foreign target acquisitions. After controlling for several deal- and merging firms-specific features we find that acquisition activity, as well as acquirers gains, are significantly higher during periods of high-EMVCs at home, irrespective of the domicile of the target. We also find that the higher foreign acquirers’ gains that reaped during periods of high-EMVCs at home are realized by deals of targets based in the RoW (=World-G7), rather than G6 (=G7-UK) countries, which is due to the low correlation of EMVCs between the U.K. (home) and the RoW countries. Moreover, acquisition of targets domiciled in the RoW (G6) countries yield higher (lower) gains than domestic targets during periods of high-EMVCs at home. This suggests that the relative EMVCs between the merging firms’ countries allow acquirers’ managers to time the market and acquire targets at a discount, particularly in countries in which acquirers’ stocks are likely to be more overvalued than the targets’ stocks