Acquirer performance in knowledge motivated acquisitions

This study uses fine-grained measures of target resources within the context of the dynamic environment of the 1990s to investigate the relationship between uncertainty, target resource type and acquirer stock market performance. The findings suggest that the market punishes acquirers of knowledge resources more than those that buy property resources due to the resource value uncertainty that affects knowledge-based acquisitions. Further, sample time frame, industry and acquirers size moderate this resourceperformance relationship. In support of the uncertainty argument, I find that managers announcing knowledge-based mergers provide more information in their press releases than those announcing property-based transactions.