Emerging market MNCs' cross-border acquisition completion: Institutional image and strategies

This study investigates the negative effect of the home country's institutional image on emerging-market multinational companies' acquisitions, and how these companies can increase their acquisition completion by overcoming this effect. We propose that a foreign acquisition is more likely...

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Bibliographic Details
Published inJournal of business research Vol. 93; pp. 139 - 150
Main Authors He, Xinming, Zhang, Jianhong
Format Journal Article
LanguageEnglish
Published Elsevier Inc 01.12.2018
Subjects
Country of origin
Emerging-market multinational company
FDI location
Foreign acquisition completion
Home base
Institutional image
Home base
Foreign acquisition completion
Country of origin
FDI location
Emerging-market multinational company
Institutional image
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Summary:This study investigates the negative effect of the home country's institutional image on emerging-market multinational companies' acquisitions, and how these companies can increase their acquisition completion by overcoming this effect. We propose that a foreign acquisition is more likely to be completed if: (1) the acquirer has an extended home base - it has inward internationalization experience, or it acquires through overseas subsidiaries; and (2) it enters institutionally close markets. Using longitudinal data on 13,259 acquisitions between 1996 and 2012 by firms from ten major emerging economies, we empirically test our hypotheses. The findings have important implications for scholars, policymakers and managers.
ISSN:0148-2963
1873-7978
DOI:10.1016/j.jbusres.2018.04.014