Killers on the road of emerging start-ups—implications for market entry and venture capital financing

Journal article

The competitive effects of acquisitions made by large US-based technology companies have come under increased regulatory scrutiny over recent years because their acquisition patterns have been viewed as potentially harming competition. This paper studies the impact of acquisitions by large US-based technology companies on the entry dynamics and venture capital financing in their target product markets. We use data from Crunchbase, a global database of start-up companies, from 742 product markets globally, distinguishing the United States and European markets for 2003–2021. Using state-of-the-art econometric developments, we estimate the dynamic treatment effects model in the staggered, dynamic event study setting. Our estimation results suggest that the technology giants’ buyouts subsequently reduced market entry rates and decreased the available venture capital funding in the product markets of the acquired companies. The acquisition of technology giants seems to generate a so-called “kill zone,” which dissuades the market entry of new companies. Our findings highlight the long-term consequences that technology giants’ acquisitions may have, including a decline in venture capital financing and the creation of entry barriers in technology-intensive markets.

Authors: Koski, H; Kässi, O; Braesemann, F

• Publication status: Published
• Peer review status: Peer reviewed
• Publisher: Oxford University Press
• Journal: Industrial and Corporate Change
• Article number: dtaf061
• Publication date: 2026-01-02
• Acceptance date: 2025-10-03
• DOI: 10.1093/icc/dtaf061
• EISSN: 1464-3650
• ISSN: 0960-6491
• Language: English