M&A deals completion and abandonment by Russian MNE

2019 ◽  
Vol 14 (3) ◽  
pp. 475-494 ◽  
Author(s):  
Lyubov Ermolaeva
Keyword(s):  
Property Rights ◽  
Host Country ◽  
Business Environment ◽  
Institutional Distance ◽  
Negative Experience ◽  
Content Type ◽  
Rights Protection ◽  
Property Rights Protection ◽  
Deal Completion ◽  
Business Freedom

PurposeThe purpose of this paper is to reveal how the host and the home countries’ formal institutions may affect mergers and acquisitions (M&A) abandonment by Russian multinational enterprises (MNEs), and how MNE industry can influence the results. The second objective of the study is to have a separate look at the negative experience, and to uncover its influence on M&A deal completion.Design/methodology/approachIn the study, a sample of 446 international M&A deals initiated by Russian MNEs in the period of 2000–2014 is empirically tested by means of logistic regression analysis.FindingsThe empirical analysis indicates that better business environment in the host country is crucially important whereas development of business freedom at home may make the international M&A less attractive and increases the likelihood of M&A deal abandonment. Thus, the larger the institutional distance by this indicator the more likelihood the deal is completed. Contrary results are implied for property rights: the larger the distance between Russia and host country, the lower likelihood of M&A deal completion. Failure experience decreases the likelihood of acquisition completion whereas international experience increases.Research limitations/implicationsThe study has number of limitations: individual-level variables were not included in the model; and a limited number of factors were tested due to availability of data and moderate sample size.Practical implicationsThe study indicates that better development of business freedom and moderate property rights protection in the host country are the most favorable factors for an M&A deal completion. Russian policymakers should realize that development of property rights protection in Russia ensures success of MNEs abroad, and development of business freedom reduces the outflow of capital from the economy.Originality/valueThe paper makes several theoretical and practical contributions: it contributes to institutional international business literature, indicating in which particular cases institutional distance has positive or negative effect on M&A completion. It also contributes to organizational learning literature, confirming that failures inhibit learning, and firms tend to repeat previous mistakes. Finally, the paper widens the scarce research on Russian MNEs, and on the role of the home country institutions for MNE’s behavior abroad.

scholarly journals Individual resources, property rights and entrepreneurship in China

2018 ◽  
Vol 13 (6) ◽  
pp. 1502-1521 ◽  
Author(s):  
Sreevas Sahasranamam ◽  
G. Venkat Raman
Keyword(s):  
Property Rights ◽  
Financial Capital ◽  
Constitutional Amendment ◽  
Chinese Government ◽  
Continuous Variables ◽  
Content Type ◽  
Necessity Entrepreneurship ◽  
Rights Protection ◽  
Property Rights Protection ◽  
Institutional Contexts

Purpose In the last decade, the Chinese Government enacted two rule-based policy changes related to property rights, namely, a constitutional amendment to protect the lawful rights of the private sector in 2004 and a property rights law in 2007. Using property rights theory, the purpose of this paper is to hypothesize the contingent effect that these property rights changes have on the investment of individual human and financial capital toward entrepreneurship. In addition, this study also explores whether property rights changes have a differential effect on the two forms of entrepreneurship, namely, opportunity and necessity entrepreneurship. Design/methodology/approach This research uses logit regression analysis on a two-period model using the Global Entrepreneurship Monitor (GEM) database to test these effects. Findings Contrary to existing evidence from western contexts, this study finds that property rights changes have a significant influence on the investment of both forms of capital toward necessity entrepreneurship in China. Research limitations/implications The use of a secondary database like GEM has certain limitations, such as the non-availability of data on a longitudinal basis, and the need to operationalize certain constructs like social and financial capital as non-continuous variables. Originality/value There has been limited research on the phenomena of necessity entrepreneurship in economies such as that of China. The findings of this study highlight that property rights protection is equally important for necessity entrepreneurship in institutional contexts like China.

scholarly journals Property rights and reputation in the dairy agro-industrial system

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Carolina Andrea Gómez Winkler Sudré ◽  
José Paulo de Souza ◽  
Melise Dantas Machado Bouroullec
Keyword(s):  
Property Rights ◽  
Transaction Cost Economics ◽  
Governance Structure ◽  
Heterogeneous Data ◽  
Structure Alignment ◽  
Industrial System ◽  
Structured Interviews ◽  
Content Type ◽  
Rights Protection ◽  
Property Rights Protection

Purpose The purpose of this study is to understand the effect of governance structure alignment, property rights protection, and reputation in generating efficiency in dairy agro-industrial system in Paraná, Brazil, and Midi-Pyrénées, France. Design/methodology/approach Descriptive qualitative research, comprising semi-structured interviews with producers, processors and key agents of the dairy agrindustrial system in Brazil and France, in 2016/2017. Findings As a result, it was identified that measurement generates information about transacted dimensions and when it is shared can generate affect reputation in transactions that leads to system improvement. It was also observed that, in the dairy agro-industrial system, reputation acquired does not reduce all the measurement costs, as the product requires measurement in each all collection, regardless of the reputation created. Research limitations/implications As a limitation of the study, there is a difference in the moments when the interviews were done. In 2016, in France, the context was low prices, while in 2017, in Brazil, there was a rise in prices. This difference could have influenced some responses to the interviews, mainly about efficiency by producers. Practical implications Reputation, protecion of property rights by measurement and information sharing allows reduction costs (transaction, measurement and negotiation costs). This efficiency implies improvement to the system, in cases of milk producers and processors. Social implications Improvements in the dairy system can have repercussions on several other improvements such as better distribution of income among agents in the chain; better-paid producers, which implies the improving quality of lives of these people; better products offered to consumers. Originality/value From a complementary perspective of transaction cost economics and measurement cost economics, reputation and protection of property rights are discussed with a focus on efficiency. Empirically, the paper contains heterogeneous data collected from two countries: Brasil and France.

scholarly journals The Effect of Intellectual Property Rights Protection in Host Economies on The Sustainable Development of China’s Outward Foreign Direct Investment—Evidence from a Cross-Country Sample

2019 ◽  
Vol 11 (7) ◽  
pp. 2100 ◽  
Author(s):  
Hong Fang ◽  
Bo Peng ◽  
Xu Wang ◽  
Siran Fang
Keyword(s):  
Foreign Direct Investment ◽  
Intellectual Property ◽  
Property Rights ◽  
Intellectual Property Rights ◽  
Host Country ◽  
Direct Investment ◽  
Outward Foreign Direct Investment ◽  
Rights Protection ◽  
Intellectual Property Rights Protection ◽  
Property Rights Protection

Intellectual property rights protection (IPRP) has caused great concern in China, especially since the introduction of the Belt and Road (B&R) initiative. The Chinese government has increased investments to the countries along the B&R, most of which are developing countries with high investment risks. Using the panel data of China’s outward foreign direct investment (OFDI) in 121 countries from 2003 to 2017, the sustainable relationships between the IPRP of host countries and China’s OFDI has been analyzed. The results of this paper show that, from the worldwide perspective, the stronger the IPRP of the host country, the greater attraction to China’s OFDI. While the IPRP of the countries along the B&R has a nonlinear U-shaped effect on China’s OFDI, which is related to the complex environments of the countries. When the IPRP of the B&R countries is within a certain range, China’s OFDI is biased toward a country with lower IPRP, and when the IPRP exceeds a certain range, China’s OFDI is biased toward a country with higher IPRP. Moreover, the market size, natural resources endowment and political environment of the host country are influential upon China’s OFDI as well. What deserves our attention is that China’s OFDI is more biased towards countries with poor political conditions, which can be related to the enterprise type and that most of the large multinational enterprises in China are state-controlled, resulting in investment decisions largely reflected by the national political goals rather than simple market targets.

scholarly journals Complex Dynamical Behaviors of a Mixed Duopoly Game Based on Intellectual Property Rights Protection

Complexity ◽  
2020 ◽  
Vol 2020 ◽  
pp. 1-11
Author(s):  
Tong Chu ◽  
Yu Yu ◽  
Xiaoxue Wang
Keyword(s):  
Intellectual Property ◽  
Property Rights ◽  
Intellectual Property Rights ◽  
Mixed Duopoly ◽  
Fractal Structures ◽  
Rights Protection ◽  
Intellectual Property Rights Protection ◽  
Dynamical Behaviors ◽  
Property Rights Protection ◽  
Coexistence Of Attractors

Based on the oligopoly game theory and the intellectual property rights protection policy, we investigate the complex dynamical behaviors of a mixed duopoly game with quadratic cost. In the new system, a few parameters are improved by considering intellectual property rights protection and the stability conditions of the Nash equilibrium point are discussed in detail. A set of the two-dimensional bifurcation diagrams is demonstrated by using numerical modeling, and these diagrams show abundant complex dynamical behaviors, such as coexistence of attractors, different bifurcation, and fractal structures. These dynamical properties can present the long-run effects of strengthening intellectual property protection.

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