Do cross-border mergers-acquisitions in mature and emerging markets create similar value?

2018 ◽  
Vol 31 (4) ◽  
pp. 944-958 ◽  
Author(s):  
Ludivine Chalencon ◽  
Ulrike Mayrhofer
Keyword(s):  
Empirical Study ◽  
Emerging Markets ◽  
Financial Markets ◽  
Emerging Economies ◽  
Value Creation ◽  
Content Type ◽  
Cross Border ◽  
A Value ◽  
Before And After ◽  
Depth Classification

Purpose The purpose of this paper is to compare the value creation of cross-border mergers and acquisitions (M&As) in mature and emerging markets. Design/methodology/approach The empirical study is based on a sample of 285 cross-border M&As announced between 2010 and 2012 and completed by companies of the French SBF 120 index in 54 countries. Findings The statistical analysis shows how financial markets react before and after the announcement of M&As. The obtained findings highlight significant differences: the reaction of financial markets before the announcement is moderately positive for M&As in mature economies, but negative for those in emerging economies; their reaction after the announcement is clearly positive for M&As in mature markets and moderately positive for those in emerging markets. Research limitations/implications Future studies on M&A value creation should differentiate mature and emerging economies and adopt a more in-depth classification of target countries. Practical implications This research emphasizes the necessity to consider country-specific factors for M&A value creation. Originality/value The empirical study is based on a sample of French acquirers, who account for 3 percent of the volume and value of M&As in the world and whose operations are rarely studied in the literature. The authors compare the reaction of financial markets before and after the announcement of M&As conducted in mature and emerging economies.

Determinants of stock market reaction to cross-border acquisitions: evidence from emerging economies

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Samta Jain ◽  
Smita Kashiramka ◽  
P. K. Jain
Keyword(s):  
Emerging Economies ◽  
Value Creation ◽  
Global Economy ◽  
Emerging Market ◽  
Research Work ◽  
Abnormal Returns ◽  
Content Type ◽  
Cross Border ◽  
Country Level ◽  
Acquiring Firms

PurposeThe global economy has witnessed an exponential increase in cross-border acquisitions (CBAs) by emerging market companies (EMCs), demanding a relook at their internationalization strategy. The purpose of the study is to investigate whether the announcement of CBAs by EMCs creates value for the equity-holders of acquiring firms and identify factors affecting the valuation of acquiring companies.Design/methodology/approachThe paper investigates the announcement impact of CBAs of CNX Nifty 500 Indian and SSE 380 Chinese companies. The event study analysis of 553 Indian and 125 Chinese acquisitions supports the contention that CBAs are indeed a strategic choice of EMCs for value creation.FindingsCBAs generate positive and statistically significant abnormal returns for shareholders of both Indian and Chinese acquirers. The markets, however, differ in terms of their motivations; country-level factors have been observed to exert significant influence on the returns of Indian acquirers. Indian companies experience larger value creation on acquiring firms established in developed, institutionally closer and/or economically distant markets. The findings support the asset-seeking motive of Indian companies.Originality/valueThe research work contributes to the evolving stream of CBAs literature with a focus on the globalization strategies of EMCs. The present study is a modest attempt to lay the foundation for a new theoretical framework (asset-seeking perspective) of overseas acquisitions from emerging economies. The existing studies on emerging economies have emphasized, in isolation, either Indian CBAs or international acquisitions by Chinese firms. Being so, the study is unique and original in the sense that it is a comparative study of India and China.

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.

Sustainable value creation through information technology-enabled supply chains in emerging markets

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Lara Schilling ◽  
Stefan Seuring
Keyword(s):  
Emerging Markets ◽  
Supply Chains ◽  
Emerging Economies ◽  
Value Creation ◽  
Emerging Economy ◽  
Social Implication ◽  
Content Type ◽  
Conceptual Reasoning ◽  
Sustainable Value ◽  
The Impact

PurposeWhile the impact of information and communication technology (ICT) on logistics and supply chain management (SCM) is recently much discussed, this is hardly linked to emerging economies and base of the pyramid (BoP) settings. The paper aims as offering a framework linking different conceptual elements to each other for explaining how ICT enables sustainable value creation in emerging economy supply chains (SCs).Design/methodology/approachThe paper builds on conceptual reasoning linking constructs from the different fields to each other.FindingsUsing conceptual reasoning linking constructs, six elements are identified: (1) SC flows, (2) BoP challenges and (3) ICT services as starting points, and environmental conditions driving sustainable value creation. The application of ICT within BoP SC operations drives the process of sustainable value creation by enabling new ways of (4) electronic business (e-business) transactions and (5) SSCM behaviors. This leads to (6) sustainable value for businesses using ICT applications and their respective stakeholders.Research limitations/implicationsEmpirical testing by collecting field data in emerging economy contexts would be demanded to address the limitation of building on conceptual reasonings.Practical implicationsThe framework provides various SC-related measures driving e-business value creation for managers of businesses, charity organizations and policymakers in emerging communities.Social implicationsUnderstanding the use of smartphones and other mobile devices for businesses and their supply chains in emerging markets would have wide ranging social implication addressed in the sustainable value creation of the framework offered.Originality/valueThe conceptual framework brings different elements together offering insights into ICT applications in BoP SCs. Linking SCM, ICT and BoP to each other is a novel contribution having wider implications for the future development of emerging economies.

Do cross-border acquisitions involving emerging market firms create value

2014 ◽  
Vol 52 (8) ◽  
pp. 1451-1473 ◽  
Author(s):  
P.C. Narayan ◽  
M. Thenmozhi
Keyword(s):  
Emerging Markets ◽  
Value Creation ◽  
Emerging Market ◽  
Operating Performance ◽  
Relative Size ◽  
Rank Test ◽  
Content Type ◽  
Cross Border ◽  
Emerging Market Firms ◽  
The Impact

Purpose – The purpose of this paper is to contribute to M&A literature by explicitly investigating whether cross-border acquisitions involving emerging markets, either as acquirers or as targets, create value and how is the performance outcome in such acquisitions impacted by deal-specific characteristics. Design/methodology/approach – This study uses industry-adjusted operating performance to measure acquisition gains, the Wilcoxon signed rank test to examine value creation potential and OLS regression to evaluate the impact of deal characteristics on acquisition gains. Findings – The authors find very pronounced value destruction when emerging market firms acquire targets in developed markets, the adverse outcome being further aggravated when the mode of acquisition is “tender offer” rather than a “negotiated deal”. On the other hand, when developed market firms acquire targets from emerging markets, there is an even chance of value creation, the outcome being favourably influenced by the pre-acquisition performance of the two firms, relative size of the target and cash (not stock-swap) as the mode of payment. Originality/value – The findings from this paper offer an important, statistically significant explanation on the value creation potential and the impact of deal characteristics on post-acquisition operating performance in cross-border acquisitions involving emerging market firms. This finding assumes immense significance, given the rapidly changing landscape of global M&A, witnessed through a continuous rise in the volume and value of cross-border acquisitions involving emerging market firms.

Influence of COO on product evaluation of mobile phones by Indian consumers: an empirical study

2014 ◽  
Vol 8 (3) ◽  
pp. 209-232 ◽  
Author(s):  
Saikat Banerjee ◽  
Bibek Ray Chaudhuri
Keyword(s):  
Empirical Study ◽  
Emerging Markets ◽  
Mobile Phones ◽  
Emerging Market ◽  
Product Evaluation ◽  
Brand Awareness ◽  
Content Type ◽  
Cross Border ◽  
Mobile Handset ◽  
Awareness Level

Purpose – The purpose of this study is to attempt to address the effect of country of origin (COO) from three different dimensions, namely, country image (CI) effect, COO image effect and awareness level about the COO of the brand and its resultant effect on product evaluation (PrEva). Further, the brand awareness, level of involvement and the COO interaction effect on consumer PrEva has also been studied to indicate the intensity of COO impact. Due to rapid globalization and reduction in trade barriers, major emerging economics from Asia witnessed entry of cross-border brands into their markets. India, as an emerging economy, has also followed the trend. In this backdrop, the present study is proposed for a better understanding of the effect of COO on PrEva. Design/methodology/approach – The study has been conducted in India, and the mobile phone market has been taken as the hub of the study because of the presence of maximum cross-border companies in India. The study is built on existing literature on influence of COO, brand image (BI), awareness about brands, CI and product image on consumer’s evaluation of mobile phones. Seven theoretical constructs have been used to test the relationship between the COO and consumer PrEva for the selected product with the help of structural equation modeling technique. Findings – The study shows that brand awareness for the class of mobile phones selected does not affect PrEva whereas CI, which is a general perception about the country from where the product originates, significantly affects consumers’ PrEva. Results also show that COO does not act as a mediator between CI and PrEva even though COO has a significant negative direct effect on PrEva. Thus, from this study, the learning for marketers in this price segment for mobile phones in emerging markets is that consumers are more sensitive to features per price than any other influencers. So, BI and/or COO are not sufficient conditions for product success in emerging market like India. Research limitations/implications – The findings are outcomes of an empirical study conducted in mobile handset industry of India based on the sample set of urban consumers in the city of Kolkata, India. It is quite possible that there may be other issues relevant to other parts of the country. This may influence the degree of association studied herein. Hence, the results may be treated with caution in terms of the generalizations of the same to other regions and countries. The study may, in future, be done by including questions related to price sensitivity and perception about features of the mobile phone hand-sets. This may give a clearer picture about the influences of these factors on PrEva of mobile phones in emerging markets. Finally, this study should be repeated in other major emerging markets to test the general applicability of the theoretical model and the empirical results introduced in this paper. Practical implications – For the low-end mobile handset market, general country characteristics from where the product originates reduce the importance of specific product attributes in evaluating the product. We may further conclude from the present study that the country’s overall image can be an effective tool to influence the consumer PrEva process. To be competitive in an emerging country like India, multinational firms should promote the overall country’s image to cement relationship with target consumers. Originality/value – Moreover, Ahmed and d’Astous (1996) viewed that several empirical research have independently focused on the impact of COO on the country, product or brand level, but there is lack of an integrated approach in this regard to capture different propensity of effects of COO at different levels. To our knowledge, it is one of the first attempts to analyze consumers’ PrEva of mobile phones in an emerging market.

scholarly journals Going Abroad, Friends on Board: Cross-Border Venture Capital and Syndication Strategy in China

SAGE Open ◽  
2021 ◽  
Vol 11 (2) ◽  
pp. 215824402110074
Author(s):  
Zhiyi Qiu ◽  
Rong Chen ◽  
Ye Yang
Keyword(s):  
Empirical Study ◽  
Venture Capital ◽  
Emerging Markets ◽  
Cultural Distance ◽  
Cross Border ◽  
Entry Strategy ◽  
China Mainland ◽  
Entrepreneurial Activities

Cross-border venture capitals (CBVCs) are increasingly prevailing in recent decades, inter alia in emerging markets like China. The venture capital (VC) firms investing outside their home countries are faced with foreignness which is broadly regarded as liability. The primary aim of this article is to contribute to our understanding how foreignness affects VC’s strategy when entering emerging markets, particularly with respect to the foreignness originated from cultural distance. The data consist of over 5,000 CBVC deals taking place in China mainland from 1988 to 2016. Our empirical study shows that, with foreignness growing, it turns from liability into advantage in the context of CBVCs. We find an inverse U-shape relationship between foreignness and syndication, with VC firm’s reputation as the moderator. Besides, foreign VC firms establish local subsidiary when faced with foreignness, which serves as alternative to syndication. The key contribution of this article is that foreignness turns from liability into advantage in emerging markets, which exerts a curvilinear impact on the entry strategy of VC firms. This study advances the knowledge of foreignness and VC strategy, and sheds new light on entrepreneurial activities in emerging markets.

Is property management viewed as a value-added service?

2019 ◽  
Vol 37 (2) ◽  
pp. 262-274 ◽  
Author(s):  
Dustin C. Read ◽  
Andrew Carswell
Keyword(s):  
Real Estate ◽  
Value Creation ◽  
Value Added ◽  
Professional Service ◽  
Property Management ◽  
Individual Property ◽  
Content Type ◽  
Creation Process ◽  
A Value ◽  
Value Creation Process

PurposeThe purpose of this paper is to examine the perspectives of real estate executives to assess the extent to which property management is viewed as a commodity or as a value-added professional service contributing positively to investment performance and property value maximization.Design/methodology/approachThe qualitative analysis draws on the result of 93 semi-structured interviews conducted with executives employed by some of the largest real estate investment management and service firms across the USA.FindingsThe findings suggest that significant perceptual cleavages exist in the real estate industry, with some executives believing property managers are incredibly important to the value creation process and others believing they play a much more modest role.Practical implicationsThe results highlight the need for the property management industry as whole to continue its efforts to gain recognition as a value-added professional service and for individual property management companies to actively take steps to differentiate themselves from competitors if they hope to avoid commodification and fee compression.Originality/valueThe study is the first to the authors’ knowledge to examine real estate executives’ perspectives about the roles property managers play in the value creation process, as well as their views about whether property managers have the skills and autonomy required to make value accretive decisions.

scholarly journals The learning organization as a context for value co-creation

2019 ◽  
Vol 27 (4) ◽  
pp. 291-303
Author(s):  
Emmanuel Mastio ◽  
Eng Chew ◽  
Kenneth Anthony Dovey
Keyword(s):  
Learning Organization ◽  
Value Creation ◽  
Social Economic ◽  
Well Being ◽  
Economic Activities ◽  
Content Type ◽  
A Value ◽  
Sustainable Value ◽  
New Perspective ◽  
Relational Capabilities

Purpose This paper aims to explore the relationship between the concept of the learning organization and that of the co-creation of value. Design/methodology/approach The paper is conceptual in nature and draws on data from a case study of a small highly innovative Australian company. Findings The authors show that, from a value co-creation perspective, the learning organization can be viewed as an open, collaborative, social/economic actor engaged in social/economic activities with other interdependent actors (organizations or stakeholders) in a network or ecosystem of actors to serve its mission/purpose and the well-being of the ecosystem. Research limitations/implications As a conceptual paper, the authors rely primarily on previous research as the basis for the argument. The implications of the findings are that, as value co-creation practices are founded upon the generation and leveraging of specific intangible capital resources, more research located in alternative research paradigms is required. Practical implications There are important implications for organizational leadership in that the practices that underpin value co-creation require the leadership to be able to work constructively with multiple forms of systemic and agentic power. Social implications In increasingly turbulent and hyper-competitive global operational contexts, sustainable value creation is becoming recognized as a collective achievement within a broad eco-system of collaborators. This has implications for the relational capabilities of all collaborators. Originality/value The authors introduce a new perspective on the role of power management in the facilitation of the co-creation of value. Arguing that value creation is becoming recognized as a “collective achievement”, they focus on the collaborative practices that enable such an achievement.

A value creation perspective on international business in Latin America: directions for differentiation between emerging market multinationals

2020 ◽  
Vol 28 (2) ◽  
pp. 157-175 ◽  
Author(s):  
Michel Hermans ◽  
Armando Borda Reyes
Keyword(s):  
Decision Making ◽  
Latin America ◽  
International Business ◽  
Latin American ◽  
Value Creation ◽  
Emerging Market ◽  
Institutional Characteristics ◽  
Content Type ◽  
A Value ◽  
Internationalization Strategies

Purpose This study aims to draw researchers’ attention to the need to differentiate within the emerging market multinational companies (EMNCs) category. This study focuses on international business in Latin America to argue that the region’s specific institutional characteristics have consequences for within-firm decision-making regarding internationalization strategies. Additionally, the study suggests that to develop a more specific understanding of international business in emerging markets, it is important to consider how decision-makers define value and how they can capture such value. Design/methodology/approach The approach used in this study draws on the bathtub analogy used in micro-foundations research in international business. It proposes a multilevel analysis in which micro-level variation in within-firm decision-making is considered, while accounting for the conditioning effects of macro-level contextual factors. Findings The study identifies characteristics of the Latin American institutional context that are relevant to international business strategies and that potentially differ from other emerging market contexts. These include the pendular shifts to and from pro-market economic reform, fragmented government intervention in business, underdeveloped capital markets, low competition among firms and polarized labor markets. The study explains how these characteristics shape the definition of value and firm strategies to capture value in international markets, and provides examples from firms in different industries. Originality/value This study applies a value creation and capture perspective to international business in Latin America, allowing for the simultaneous consideration of macrolevel institutional characteristics and microlevel variation in decision-making regarding internationalization strategies. This perspective not only helps to distinguish Latin American EMNCs from companies from other emerging market contexts, but also explains the considerable variation in the internationalization strategies of firms within the region.

Evolving talent management patterns and challenges in Russia and Kazakhstan

2019 ◽  
Vol 14 (3) ◽  
pp. 411-426
Author(s):  
Violetta Khoreva ◽  
Edyta Kostanek
Keyword(s):  
Emerging Markets ◽  
Emerging Economies ◽  
Multinational Enterprises ◽  
Design Methodology ◽  
Talent Management ◽  
Business Leaders ◽  
Structured Interviews ◽  
Content Type ◽  
Employer Perspective ◽  
Fierce Competition

Purpose The purpose of this paper is to investigate the evolving patterns and challenges of talent management (TM) in the emerging markets of Russia and Kazakhstan from the employer perspective. Increasing the understanding of how TM is recognized from the employer perspective may better equip us to address how to effectively manage and lead the available talents in these and other emerging markets. Design/methodology/approach The authors conducted a qualitative study comprising 50 semi-structured interviews, with 37 business leaders from Russian subsidiaries, and 13 from Kazakh subsidiaries, in all cases of Nordic Multinational enterprises (MNEs). Findings The study supports the object approach to TM in the emerging markets of Russia and Kazakhstan. The authors reveal that the exclusive and developable talent philosophy is predominant in these emerging markets, where TM faces the challenges of fierce competition for talents and an insufficient supply, so business leaders tend to be reluctant to inform employees of their talent pool membership. The results demonstrate that MNEs do not act independently of context, thus supporting calls for consideration of the local institutional context. Originality/value TM is still a somewhat novel idea in many emerging economies, and challenges related to managing talents are believed to be far more complex in such settings. Furthermore, to the best of authors’ knowledge, no studies have investigated the notion of talent and TM conceptualization in the emerging markets from an employer perspective.

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