Too Crowded to Innovate: Competitive Crowding and Inventor Productivity Slowdown in Acquiring Firms

Firms in high-tech industries frequently pursue technological acquisitions to enhance innovation and sustain a competitive advantage. While prior research has offered valuable insights into organizational- level outcomes, relatively little attention has been paid to individual-level consequences, particularly for employees in the acquiring firm who constitute the technical core of innovation. This study examines how social dynamics that unfold in the post-acquisition context shape the innovation productivity of these acquirer inventors. Drawing on network theory, we argue that competitive crowding―defined as intensified rivalry with inventors from the acquired firm within overlapping technological domains―inhibits collaboration and intensifies competition for organizational resources and recognition. These dynamics contribute to a productivity slowdown during the initial post-acquisition period. We further suggest that the impact of competitive crowding is contingent upon the network context, specifically the degree of status similarity and the extent of network segregation. Analyzing data on 130,600 acquiring inventors involved in U.S. high-tech acquisitions between 2002 and 2015, we find empirical support for these claims. By uncovering how social structures influence individual productivity during periods of organizational change, this research contributes significantly to the acquisition literature and broadens the theoretical scope of network theory.