Ideas, Inventors, and Deals: The Innovation–M&A Nexus

This review examines how M&A reshape the creation, diffusion, and ownership of innovation. It treats M&A as one form of boundary choice over innovative assets and people, alongside licensing, alliances, corporate venture capital, minority stakes, inventor mobility, and acqui-hires. Synthesizing evidence from finance, industrial organization, strategy, and sector studies, the review explains why firm boundaries matter for knowledge flows; how innovation shapes who buys whom; and how acquisition markets affect inventive effort, start-up exits, and the build-versus-buy boundary. Post-M&A outcomes are heterogeneous because deals are selected matches and innovation has multiple margins: R&D effort, patenting, novelty, exploration, exploitation, commercialization, diffusion, and human capital reallocation. The review closes by linking property rights and labor market perspectives on inventors, teams, mobility, acqui-hiring, and labor market power and by outlining a policy-relevant agenda.