Acquisition is an important activity that enables firms to adapt their resource configurations. Acquisition literature has focused only on the levels of innovation or relational resources, the primary dimensions of organizational resource bases. The authors argue that in addition to the levels, the degree of overlap between the acquiring and target firms, in terms of innovation and relational resources, should influence acquisitions. Furthermore, they argue for the importance of the quality of the target's resources along with factors influencing the acquirer's absorptive capacity (e.g., the chief executive officer's [CEO's] functional background and the acquiring firm's marketing intensity and acquisition experience) as contingencies. Using 319 biopharmaceutical acquisitions and a random-effect regression model that accounts for unobserved heterogeneity and the endogeneity of relational and innovation overlap, the authors find that innovation overlap has a positive effect, whereas relational overlap has a negative effect, on acquisition outcomes. Furthermore, the acquirer CEO's throughput background and acquisition experience negatively moderate, whereas the target's innovation resource quality and the acquirer's marketing intensity positively moderate, the influence of innovation overlap. The target's relational resource quality and the acquirer CEO's throughput background positively moderate the influence of relational overlap.
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