Knowledge sharing and NPD performance for UK cross – border M&A firms: the moderating role of behavior and outcome controls

Abstract

Purpose

This paper aims to explore how the effect of knowledge sharing through mergers and acquisitions (M&As) on new product development (NPD) performance is contingent upon two different types of control mechanisms: behavior control and outcome control.

Design/methodology/approach

Leveraging the theory from transaction cost economics, this study provides answers regarding the roles of behavior and outcome controls. The hypotheses were tested empirically across a sample of 143 UK cross-border M&A firms.

Findings

The results provide the increasing call for an integrative perspective and theory in the M&A literature in that knowledge sharing through M&As is deemed decisive for NPD performance, and while both control mechanisms are effective, behavior control is more effective in enhancing NPD performance than outcome control.

Originality/value

The relevant M&A studies lack insights into the use of control mechanisms as a way to monitor the target firm’s behavior and performance and reduce the risk of its opportunistic behavior. Appreciating the need for M&A literature that elaborates control strategy and structure, this study incorporates behavior control and outcome control into M&A mechanisms.