scholarly journals The Institutional Influence on the Location Strategies of Multinational Enterprises from Emerging Economies: Evidence from China's Cross-border Mergers and Acquisitions

2016 ◽  
Vol 12 (3) ◽  
pp. 425-448 ◽  
Author(s):  
Peter J. Buckley ◽  
Pei Yu ◽  
Qing Liu ◽  
Surender Munjal ◽  
Pan Tao
Keyword(s):  
Mergers And Acquisitions ◽  
Host Country ◽  
Emerging Economies ◽  
Multinational Enterprises ◽  
Country Risk ◽  
Cross Border ◽  
Institutional Influence ◽  
Location Strategies ◽  
Chinese Multinational Enterprises

ABSTRACTThis study investigates the institutional influence on the location strategies of Chinese cross-border mergers and acquisitions (M&A) during the period 1985–2011 across 150 economies using Heckman's two-stage model. The results suggest that Chinese Multinational Enterprises (MNEs) are ‘shortsighted’ and show perverse behaviour towards host country risk when deciding on the location of host country and volume of investment undertaken through M&As, which may damage the firm's long-term profitability.

scholarly journals China's Cross-border Mergers and Acquisitions: A Contextual Distance Perspective

2016 ◽  
Vol 12 (3) ◽  
pp. 449-456 ◽  
Author(s):  
Jiatao Li ◽  
Guoguang Wan
Keyword(s):  
Mergers And Acquisitions ◽  
Host Country ◽  
Large Dataset ◽  
Chinese Firms ◽  
Research Attention ◽  
Global Policy ◽  
Cross Border ◽  
Political Risks ◽  
Greenfield Investments ◽  
Institutional Contexts

Outward foreign direct investment (OFDI) by Chinese firms has received considerable research attention recently (Li, Cui, & Lu, 2014; Lu, Liu, Wright, & Filatotchev, 2014; Xia, Ma, Lu, & Yiu, 2014). In particular, a number of studies have focused on cross-border mergers and acquisitions (M&As) involving Chinese firms (Li, Li, & Wang, 2016; Li & Xie, 2013; Xie & Li, 2016; Zhang, Zhou, & Ebbers, 2011). Following Child and Marinova's (2014) suggestion that both the home and host country institutional contexts play important roles in determining M&A activity, Buckley and his colleagues have examined how China's ‘Go Global’ policy influences the location choices in Chinese acquisitions and also how host country political risks affect such activities (Buckley et al., 2016). They looked into national political and legal conditions (see also Meyer, Estrin, Bhaumik, & Peng, 2009), and also examined a large dataset on China's cross-border M&As. Much of the previous work in this area has focused on greenfield investments (Duanmu, 2012; Kang & Jiang, 2012), so the work of Buckley et al. (2016) has broken new ground.

scholarly journals How to Attract Talented Expatriates: The Key Role of Sustainable HRM

2019 ◽  
Vol 11 (19) ◽  
pp. 5373 ◽  
Author(s):  
Gahye Hong ◽  
Eunmi Kim
Keyword(s):  
Emerging Markets ◽  
Family Support ◽  
Direct Effect ◽  
Host Country ◽  
Multinational Enterprises ◽  
Moderating Effect ◽  
Country Image ◽  
The Us

Retaining talented expatriates is important for multinational enterprises (MNEs) to maintain knowledge sustainability between their headquarters (HQ) and subsidiaries. However, depending on the host country image of a subsidiary, the attractiveness of the subsidiary may make it challenging to recruit prospective expatriates. Based on the sustainable human resource management (HRM) perspective, this study examines the direct effect of the host country image of a subsidiary and the moderating effect of family support policies on a subsidiary’s attractiveness, by comparing subsidiaries in the US and Vietnam. The results are based on data from 434 Korean potential expatriate applicants and show that the host country image of a subsidiary has a direct effect on the subsidiary’s attractiveness. Specifically, expatriate applicants are less attracted to a Vietnam-based subsidiary than to a US-based one. Further, the positive moderating effect of family support policies on subsidiary attractiveness is more relevant for the Vietnam-based subsidiary. This result suggests that family support policies can be a key strategy for overcoming the less preferred host country images of subsidiaries in emerging markets, thus improving subsidiary sustainability in the long term. The implications of these findings are provided in the context of sustainable HRM and the existing expatriate literature.

scholarly journals How weaknesses in home country location advantages can constrain EMNE growth

2016 ◽  
Vol 24 (3) ◽  
pp. 249-278 ◽  
Author(s):  
Rajneesh Narula ◽  
Tiju Prasad Kodiyat
Keyword(s):  
Emerging Economies ◽  
Multinational Enterprises ◽  
Home Country ◽  
Competitive Advantages ◽  
Policy Changes ◽  
Systems Of Innovation ◽  
Content Type ◽  
Knowledge Infrastructure ◽  
Knowledge Intensive

Purpose This paper aims to discuss the opportunities and limitations that the location-specific advantages of the home country represent for infant multinational enterprises (MNEs). The systemic weaknesses of the home country can constrain the long-term competitiveness of its firms and, ultimately, the competitiveness of its MNEs. Many emerging countries have a constrained set of location-specific (L) assets from which their firms are able to develop ownership-specific assets. Design/methodology/approach The authors examine data for the case of India, an economy regarded as having considerable potential to expand to knowledge-intensive sectors, using a “systems of innovation” framework, merged with an analysis of L advantages. Findings At the macro level, India’s performance is not different from countries of similar economic structure, and its current pockets of excellence are a reflection of its L assets. The analysis suggests that the failure to foster and upgrade the L assets of emerging economies is likely to stunt the growth of their domestic firms and, ultimately, any new MNE activity in the long-term. Research limitations/implications In the case of India, systemic policy changes are needed to upgrade the knowledge infrastructure and institutions to support a shift in the competitive advantages to new sectors outside existing pockets of excellence. Indian firms are unlikely to be able to rely on the knowledge infrastructure of their home economy and will “exit” the Indian milieu because of weaknesses in L assets, as much as to seek markets and customers elsewhere. There will be few opportunities for new generations of firms to venture abroad from a position of strength, rather than as a means to overcome their home country disadvantages. Originality/value The evidence would suggest that – like other emerging economies – Indian firms are unlikely to be able to rely on the knowledge infrastructure of their home economy and are “exiting” the Indian milieu because of its weaknesses in L assets, as much as to seek markets and customers elsewhere. Most importantly, India faces a potential shortage of skilled human capital in the medium term.

The performance of cross-border acquirers from emerging economies

2016 ◽  
Vol 7 (1) ◽  
pp. 21-38 ◽  
Author(s):  
Xiaobai Ma ◽  
Yiying Zhu ◽  
Wenyuan Cai
Keyword(s):  
Emerging Economies ◽  
Ownership Structure ◽  
Value Creation ◽  
Multinational Enterprises ◽  
Design Methodology ◽  
Business Community ◽  
Short Term ◽  
Content Type ◽  
Cross Border ◽  
Traditional Understanding

Purpose – This paper aims to evaluate the value creation of cross-border acquisitions conducted by Chinese firms and determinants that result in the different performance. During the recent decades, the world has witnessed multinational enterprises (MNEs) from emerging economies undertaking aggressive cross-border mergers and acquisitions (M & As). This phenomenon raises great attention in the international business community, and also challenges the traditional understanding in the extant literature. Design/methodology/approach – The authors examine 272 cross-border M & As associated with 48 target countries during the period 1996-2012. Findings – Evidences show that cross-border expansions on average point to negative performance in the short term. The authors also find that prior cross-border M & A experiences, ownership structure of the acquirer (state-owned vs private) and acquirer size positively affect the performance of the acquiring firm. Originality/value – In addition to contributing to cross-border M & A literature, the findings also provide useful guidance to outward foreign direct investment by firms from emerging economies.

The long-term performance of cross-border mergers and acquisitions

2015 ◽  
Vol 9 (3) ◽  
pp. 385-400 ◽  
Author(s):  
Sai Lan ◽  
Fan Yang ◽  
Hong Zhu
Keyword(s):  
Mergers And Acquisitions ◽  
Developed Countries ◽  
Performance Outcomes ◽  
Chinese Firms ◽  
Content Type ◽  
Cross Border ◽  
Study Methodology ◽  
Long Term Performance ◽  
Term Performance

Purpose – The purpose of this paper is to examine Chinese firms’ long-term value creation derived from cross-border mergers and acquisitions (CBMAs). Design/methodology/approach – The authors collected a sample of 140 CBMAs conducted by Chinese firms listed in Shenzhen and Shanghai stock markets between 1997 and 2010. Long-horizon event study methodology was used to test hypotheses. Findings – The authors find Chinese firms gain long-term value from CBMAs. In particular, the authors find that Chinese firms tend to gain more value from targets from developed countries, and Chinese state-owned firms are more capable of gaining value from CBMAs than Chinese private firms. Originality/value – Given Chinese firms are increasingly acquiring targets outside of China in recent years, it is still unclear about whether Chinese firms gain value from these very expensive cross-border deals. This is one of the first studies that address the question: What are the long-term performance outcomes of Chinese CBMAs in recent years?

Effects of Cross-border Merger and Acquisition on the Operational Risk of US and Canadian Companies

2020 ◽  
pp. 097215091989509
Author(s):  
Bruno Lopes de Paula ◽  
Daiana Paula Pimenta ◽  
Ricardo Limongi França Coelho ◽  
Jaluza Maria Lima Silva Borsatto ◽  
Rafael Manoel de Oliveira
Keyword(s):  
Decision Making ◽  
Panel Data ◽  
Mergers And Acquisitions ◽  
Emerging Economies ◽  
Operational Risk ◽  
Merger And Acquisition ◽  
Emerging Countries ◽  
Cross Border ◽  
The World ◽  
The Relationship

The integration of the world economies is responsible for an increase in the number of cross-border mergers and acquisitions (M&A), together with the growing participation of companies from emerging countries in this type of investment. However, the area studies focus their analyses on the determinants, antecedents and profitability of the companies, leaving the effects of this type of business on the operational risk of the companies involved as a gap to be explored. To fill it, we used panel data regressions to identify the relationship between cross-border M&A and the operational risk of companies. The results indicate that acquiring companies based in emerging economies are the ones that suffer the most significant impacts on this type of business. As the implication, this study serves as a basis for the decision-making of the managers of the acquiring companies, being able to identify the risks of this activity and the ways of preventing them.

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