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The Strathprints institutional repository is a digital archive of University of Strathclyde's Open Access research outputs. Strathprints provides access to thousands of Open Access research papers by University of Strathclyde researchers, including by researchers from the Department of Computer & Information Sciences involved in mathematically structured programming, similarity and metric search, computer security, software systems, combinatronics and digital health.

The Department also includes the iSchool Research Group, which performs leading research into socio-technical phenomena and topics such as information retrieval and information seeking behaviour.

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After the exit: acquisitions, entrepreneurial recycling and regional economic development

Mason, C.M. and Harrison, R.T. (2006) After the exit: acquisitions, entrepreneurial recycling and regional economic development. Regional Studies, 40. pp. 55-73. ISSN 0034-3404

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Abstract

Most studies of the impact of mergers and acquisitions suggest they have a detrimental impact on economic development in peripheral regions over the longer-term. However, such assessments fail to consider the post-acquisition behaviour of the cashed-out entrepreneurs. It is argued here that acquisition triggers a process of 'entrepreneurial recycling' in which the entrepreneurs use their newly acquired wealth, allied to the experience they have accumulated, to engage in other entrepreneurial activities, notably starting new business ventures and investing in other businesses as business angels or venture capitalists. Case studies of five Scottish technology-based firms that were acquired by non-UK companies illustrate this process. When entrepreneurial recycling is taken into account, the overall impact of acquisition on regional economic development may be considerably more positive than the literature has suggested. Moreover, at a time when 'rustbelt' regions, such as Scotland, are becoming less competitive as locations for foreign direct investment, the acquisition of locally owned knowledge-based companies remains a way in which they can continue to attract such investment. The paper concludes with a research agenda for future studies of the 'harvest event'.