Exiting the market by mergers and acquisitions. Does the crisis matter?

We explore whether and to what extent the business cycle affects the influence of firms' innovation profile on their market exit decisions through mergers and acquisitions (M&A). This study suggests that the nature of innovation behind the M&A exit strategy is very different during crisis or non-crisis economic periods. We tested our hypothesis on a sample of 358 M&A that occurred in Europe before (145) and after (213) the financial crisis of 2008. The results of probit estimates show that: 1) internal R&D and product innovations are major drivers of M&A deals in young industries, whereas process innovations play a crucial role in mature industries; 2) patents are the only key innovation drivers of M&A after the crisis, both in young and mature industries. The mechanism behind these emergent behaviours allows to grasp some important aspects that are still not fully developed in the literature.