Inter-temporal Scope and the Synergy Life Cycle
Publication Date
8-24-2025
Abstract
We investigate intertemporal scope in acquisitions. The intertemporal scope entails the redeployment of a capability that has been used up and then reactivated. The capability we examine is a commercial bank's ability to restructure troubled debt. We study the capability's redeployment when "capable" acquirers buy target banks with a high percentage of bad loans. We argue that smaller banks are more able to redeploy the capability because their smaller size facilitates retrieving the knowledge underlying it. Also, a capable acquirer's improvement in the target's debt should follow a synergy life cycle as the target's bad loans are restructured. Using a triple-differences (DDD) methodology, we find support for our hypotheses and discuss their relevance to research on intertemporal scope and the synergy life cycle.
Document Type
Article
Disciplines
Strategic Management Policy
DOI
10.2139/ssrn.5403776
Source
SMU Cox: Strategy (Topic)
Language
English
