Post-acquisition control strategy and cross-border acquisition performance of Chinese MNEs: a fsQCA approach

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Qi Yue ◽  
Ping Deng ◽  
Yanyan Cao ◽  
Xing Hua
Keyword(s):  
Fuzzy Set ◽  
Control Strategy ◽  
Multinational Enterprises ◽  
Cultural Distance ◽  
Emerging Market ◽  
Complex Nature ◽  
Acquisition Performance ◽  
Content Type ◽  
Cross Border ◽  
Chinese Mnes

PurposePost-acquisition control is a crucial factor affecting acquisition performance. We investigate how post-acquisition control strategy affects cross-border acquisition performance of Chinese multinational enterprises (MNEs) through a configurational perspective.Design/methodology/approachBased on 70 cross-border acquisition cases by Chinese MNEs, we adopt fuzzy-set qualitative comparative analysis (fsQCA) to study the combined effects of strategic control, operational control, institutional distance, cultural distance, relative capacity and business relatedness on the cross-border acquisition performance.FindingsOn the basis of fuzzy set analysis of multiple interdependent factors, we identify six configurations that are conductive to achieving high cross-border acquisition performance and two configurations that relate to the absence of high performance, thus shedding light on the casually complex nature of performance drivers of acquisitions.Originality/valueThis study provides a holistic, configurational approach to investigating cross-border acquisition performance by emerging market firms. Our results provide some compelling evidence that accounts for the causal complexity of post-acquisition control strategies and acquisition outcomes in the context of emerging economies.

How does liability of origin influence cross-border acquisition completion? Evidence from Chinese firms

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tingting Jiang ◽  
Buyun Yang ◽  
Bo Yang ◽  
Bo Wu ◽  
Guoguang Wan
Keyword(s):  
Multinational Enterprises ◽  
Home Country ◽  
Emerging Market ◽  
Organizational Legitimacy ◽  
Binary Logistic Regression Model ◽  
Firm Level ◽  
Content Type ◽  
Low Level ◽  
Cross Border ◽  
Chinese Mnes

Purpose The environment of international business (IB) and the capabilities of emerging market multinational enterprises (EMNEs) as well as their home countries have changed significantly, leading to some new features of liability of origin (LOR). This paper aims to extend the LOR literature by particularly focusing on the LOR of Chinese multinational enterprises (MNEs) and by taking into account the heterogeneity among industries and across individual MNEs. Design/methodology/approach Based on the stereotype content model and organizational legitimacy perspective, this study explores how LOR influences Chinese MNEs’ cross-border acquisition completions. Several hypotheses were tested by using a binary logistic regression model with panel data techniques based on data of 780 Chinese MNEs’ acquisition deals between 2008 and 2018. Findings The results of this study show that when the competence dimension of China’s LOR is perceived as high in the host country, Chinese MNEs are less likely to complete cross-border acquisitions. Moreover, deals are less likely to be completed when the warmth dimension of China’s LOR is perceived to be low. Global experience and the foreign-listed status of individual Chinese MNEs can alter the relationship between the LOR and deal completions. Originality/value This study advances and enriches the LOR research. It shows that a high level of competence in the home country has led to LOR for Chinese MNEs rather than the low level of competence proposed by existing LOR studies; and the LOR for Chinese MNEs is also determined by the perceived low level of warmth in the home country resulting from the geopolitical conflicts between two countries. In addition, the LOR suffered by EMNEs could vary based on certain industry- and firm-level characteristics. The findings of this study provide important practical implications for emerging economy governments and for firms intending to go abroad.

Cultural and organizational integration in cross-border M&A deals

2017 ◽  
Vol 30 (7) ◽  
pp. 1109-1135 ◽  
Author(s):  
Andrei Panibratov
Keyword(s):  
Case Studies ◽  
Multinational Enterprises ◽  
Emerging Market ◽  
Strong Support ◽  
Annual Reports ◽  
Integration Process ◽  
Key Factors ◽  
Content Type ◽  
Cross Border ◽  
Organizational Integration

Purpose The purpose of this paper is to identify key factors that influence the integration process in cross-border mergers and acquisitions (M&A) deals of emerging multinational enterprises (EMNEs). The research questions are: how national and organizational culture coupled with other organizational characteristics influence M&A deals of EMNEs? Which factors influence the process of cultural and organizational integration in cross-border M&A deals, initiated by EMNEs? What is the effect and consequences that different integration factors have on cross-border M&A deals by EMNEs? Design/methodology/approach The paper is based on a multiple case study research, considering cross-border deals of Chinese and Russian firms separately. Each block consists of two cases, describing M&A integration of companies operating in two sectors: high technology and finance. The authors obtained the data for case studies from companies’ official websites, annual reports, press releases, other official documents where companies were mentioned, business-media sources (newspapers and magazines), published interviews, documented speeches, letters, laws, as well as through blogs and social networks. The authors have also used the published information from articles, books, databases, and previously conducted case studies. Findings The authors have identified the factors influencing deals’ results of Chinese and Russian MNEs, with explanation based on case studies’ analysis. The full list of factors is presented in Table IV in the manuscript. The authors have also identified the set of elements that were derived from the case studies’ analysis only, without having any strong support in the literature, such as changes at a senior management level, educational and business exchanges, CSR policy, and the government involvement. Originality/value The authors have identified the key factors that influence integration of emerging market firms in cross-border M&A deal. The list of factors was adjusted and actualized in accordance with the results of four cases of cross-border M&A deals of Chinese or Russian companies. As a result, the authors founded the combination of characteristics of cultural and organizational integration process of firms from China and Russia.

Ownership participation of cross-border mergers and acquisitions by emerging market firms

2015 ◽  
Vol 53 (1) ◽  
pp. 221-246 ◽  
Author(s):  
Monica Yang
Keyword(s):  
Mergers And Acquisitions ◽  
Cultural Distance ◽  
Emerging Market ◽  
Foreign Market ◽  
Foreign Market Entry ◽  
Firm Level ◽  
Content Type ◽  
Cross Border ◽  
Emerging Market Firms ◽  
The Relationship

Purpose – The purpose of this paper is to adopt a multi-level approach to investigate what factors shape the content of emerging market firms’ foreign market entry decisions, particularly the ownership participation in cross-border mergers and acquisitions (M&As). In addition, the author would like to know if companies from emerging markets that possess higher (or lower) ownership in cross-border M&As receive higher valuation in the market. Design/methodology/approach – Using panel data of cross-border M&As by emerging market firms from 2000 to 2012, the author tests the hypothesized effects of the independent variables on the level of ownership participation; and uses a standard event study methodology to assess the market reaction of a particular cross-border M&A deal. Findings – The author finds that a country-level factor (institutional distance), an industry-level factor (industry unrelatedness) and a firm-level factor (board concentration) have significant impact on ownership participation in cross-border M&As. The author also finds that investors do give high valuation to those emerging market firms that chose high ownership participation in cross-border M&As. However, the author did not finds the support for the relationship between ownership participation and cultural distance. Neither did the author finds the support for the relationship between ownership participation and board independence. Originality/value – This study enhances the understanding of conditions under which the level of ownership participation in cross-border M&As would increase (decrease) and how the market reacts to high (low) ownership participation of cross-border M&As by emerging market firms.

The management of Chinese MNEs’ expatriates

2015 ◽  
Vol 3 (3) ◽  
pp. 289-302 ◽  
Author(s):  
Yifan Zhong ◽  
Cherrie Jiuhua Zhu ◽  
Mingqiong Mike Zhang
Keyword(s):  
Multinational Enterprises ◽  
Emerging Market ◽  
Critical Role ◽  
Theory And Practice ◽  
Outward Fdi ◽  
Tertiary Institution ◽  
Developed Country ◽  
Content Type ◽  
Chinese Mnes ◽  
Expatriate Management

Purpose – Expatriate management is a popular topic in international human resource management (IHRM) because expatriates play a critical role in a firm’s international business operations. The purpose of this paper is to discuss the existing studies that often examine the expatriate management of developed country multinational enterprises (MNEs), aiming to help them identify, employ, prepare and retain expatriates and address challenges these MNEs may face, while how MNEs from emerging countries manage their expatriates is understudied. Design/methodology/approach – The knowledge of expatriate management from emerging market MNEs (EMNEs) may help us understand whether there is anything new for IHRM theory and practice. This conceptual paper aims to address this research gap by selecting China, a leading emerging economy, and reviewing the existing literature in both English and Chinese to examine the status quo of the expatriate management in Chinese MNEs to highlight challenges facing these MNEs in managing their expatriates when conducting outward foreign direct investment (FDI). Findings – This paper aims to make theoretical contributions by generating research propositions to address an under-researched area, i.e., how EMNEs manage their expatriates and the role of their expatriates in the outward FDI. Originality/value – No other person’s work has been used in the main text of the paper. This paper has not been submitted for the award of any other degree or diploma in this or any other tertiary institution.

What is in a name? Cross-national distances and subsidiary’s corporate visual identity change in emerging-market firms’ cross-border acquisitions

2018 ◽  
Vol 35 (2) ◽  
pp. 301-319 ◽  
Author(s):  
Ru-Shiun Liou ◽  
Rekha Rao-Nicholson ◽  
David Sarpong
Keyword(s):  
Cultural Distance ◽  
Emerging Market ◽  
Institutional Distance ◽  
Foreign Subsidiaries ◽  
Content Type ◽  
Cross Border ◽  
Economic Distance ◽  
Visual Identity ◽  
Emerging Market Firms ◽  
Cross National

Purpose Addressing the unique challenge facing emerging-market firms (EMFs) of branding and marketing in their foreign subsidiaries, the purpose of this paper is to evaluate the foreign subsidiary’s corporate visual identity (CVI) transitions during the post-acquisition period. Design/methodology/approach Data on 330 cross-border acquisitions from five emerging markets, namely, Brazil, Russia, India, China and South Africa (BRICS) are used. The cross-sectional multivariate analyses are used to test the hypotheses. Findings Utilizing a sample of worldwide acquisitions conducted by EMFs originated from BRICS, this study establishes that various cross-national distances do not consistently cause the targets to take on the parent’s CVI. While economic distance and formal institutional distance increase the likelihood of an acquired subsidiary’s CVI change, cultural distance decreases the likelihood of CVI change. Practical implications Lacking international experience and shaped by national differences between the host and home markets, EMFs often grant foreign subsidiaries substantial autonomy to respond to diverse stakeholder demands in subsidiary branding. Contrary to extant literature, the findings show that some distances are more pertinent to CVI transformation in the subsidiaries than others in the context of the EMFs. Originality/value This research shows that the formal institutional distance and economic distance will increase the likelihood of CVI changes in the subsidiaries, whereas, the cultural distance requiring soft skills like the cultural adaptability from the EMFs will decrease the CVI change possibility. The findings presented in the paper have significant implications for future research and strategic application.

Comparative analysis of FDI by Indian and Chinese MNEs in Europe

2020 ◽  
Vol 32 (5) ◽  
pp. 893-907 ◽  
Author(s):  
Viatcheslav Avioutskii ◽  
Mouloud Tensaout
Keyword(s):  
Multinational Enterprises ◽  
Good Governance ◽  
Emerging Market ◽  
Holistic Approach ◽  
Structural Factors ◽  
Content Type ◽  
Configurational Approach ◽  
Chinese Mnes ◽  
Pure Strategies ◽  
Knowledge Seeking

Purpose Exploration of potential markets in foreign regions such as Europe becomes critical for emerging market multinational enterprises (MNEs). This study aims to investigate structural factors that affect the location choice of Chinese and Indian MNEs in Europe and compares them with USA and Japanese MNEs. Design/methodology/approach The authors use a holistic approach to identify possible configurations of the determinants of Indian and Chinese outward foreign direct investment (FDI) into 38 European countries. The authors test two configurations as follows: knowledge-seeking by Chinese and Indian MNEs in “non-predictable” markets; market-seeking by USA and Japanese MNEs. Findings The findings reveal several strategies deployed in Europe by Chinese and Indian MNEs that are more specific than the pure strategies identified in the literature (e.g. market-seeking, knowledge-seeking). More importantly, unlike USA and Japanese MNEs, the findings confirm a two-stage strategy hypothesis for Chinese MNEs in Europe. Additionally, they show that the quality of institutions and infrastructure underlies the attractiveness of a territory. Research limitations/implications Multilevel configurational research might have also been used to consider firm- and industry-level determinants. Practical implications Good governance positively affects the entire set of locational determinants. In addition, good infrastructure and institutions are necessary conditions for a country to attract FDI inflow. Originality/value Recent internationalization models have been useful in identifying drivers of FDI by emerging market multinational enterprises vs advanced market multinational enterprises in Europe. This study mobilizes a comparative configurational approach.

scholarly journals Technology-sourcing investment abroad as an enhancer of Chinese MNEs’ innovative capabilities

2015 ◽  
Vol 10 (2) ◽  
pp. 243-271 ◽  
Author(s):  
Philippe Gugler ◽  
Laura Vanoli
Keyword(s):  
Foreign Direct Investment ◽  
Citation Analysis ◽  
Direct Investment ◽  
Multinational Enterprises ◽  
Knowledge Diffusion ◽  
Technological Capabilities ◽  
Content Type ◽  
Chinese Mnes ◽  
Firm Knowledge ◽  
Innovative Capabilities

Purpose – The purpose of this paper is to focus on Chinese firms’ innovation processes that are induced by foreign direct investment abroad. The study uses a patent and citation analysis to examine the extent to which investments abroad contribute to enhancing these firms’ innovative capabilities. More specifically, this study focusses on the role of foreign location competitiveness as an asset to provide technological capabilities to Chinese affiliates. Design/methodology/approach – Patents are good indicators of firms’ innovative capabilities. Moreover, patents allow to track the inter-firm knowledge transfer through the citations of patents on which they are based. The authors use an OECD patent database called “OECD REGPAT July 2013” that compiles patents registered with the European Patent Office (EPO) over the period from 1986 to 2013. The authors focus the analysis on patents registered by Chinese multinational enterprises’ (MNEs) based in Europe because the authors assume inter alia that innovations patented by Chinese affiliates in Europe are registered with the EPO. The sample comprises 3,010 patents involving 5,749 citations that the authors have individually examined. Findings – The findings suggest that Chinese MNEs ability to generate innovation based on their own knowledge is low, with a self-citation rate of approximately 4 percent. Patents by Chinese MNEs are largely based on foreign patents, especially from developed economies (at least 90 percent). The citation analysis also suggests that 39.2 percent of citations represent domestic firms in the local recipient country. This subgroup of citations is categorized as follows: 1.04 percent are M&A linkages, 13.8 percent are cluster linkages, and 24.36 percent are localization linkages. The remaining 60.8 percent of the total sample demonstrates that firms do not necessarily need to be collocated in foreign locations with domestic firms to exchange assets. Research limitations/implications – Patent and citation analysis considers only a part of the inter-firm knowledge diffusion. Some innovations are not patented and tacit knowledge diffusion is not observable. Moreover, the analysis focusses only on Chinese outward foreign direct investment to Europe, but a large part of knowledge is accumulated in China thanks to inward foreign direct investment. Originality/value – Many scholars have scrutinized emerging markets multinational enterprises’ strategic asset-seeking investments abroad that are designed to upgrade the companies’ technological capabilities (Cui and Jiang, 2009; Zhang and Filippov, 2009; Huang and Wang, 2013; Amighini et al., 2014; De Beule et al., 2014; Nicolas, 2014). However, few studies analyze the results of these strategies in terms of innovation output.

Are multinational enterprises in retreat?

2018 ◽  
Vol 26 (2) ◽  
pp. 94-110 ◽  
Author(s):  
Jan-Erik Vahlne ◽  
Inge Ivarsson ◽  
Claes G. Alvstam
Keyword(s):  
Multinational Enterprises ◽  
Annual Reports ◽  
External Trade ◽  
Content Type ◽  
Cross Border ◽  
Advanced Economies ◽  
Economic Interaction ◽  
Political Decisions ◽  
Practical Implications ◽  
Insight Into

Purpose This paper aims to contribute to the debate concerning the asserted end of the globalization process. Design/methodology/approach This paper is a description of the evolution of all Swedish MNEs, the 50 largest companies and the ten truly global MNEs, building on data compiled by the authors, mainly from annual reports. Findings The largest Swedish MNEs have continued to globalize and have at the same time improved their financial performance during the period of study, 2010-2016. Practical implications The proposition that multinationals are heading home cannot be confirmed in the Swedish case. There is therefore a need to compare Swedish experiences with other national examples to better generalize the findings. Social implications The political decisions regarding external trade and foreign direct investment should support continuous liberalization and facilitation of cross-border economic interaction. Originality/value As Swedish MNEs are more globalized than the average in advanced economies, this study offers insight into the contemporary internationalization process.

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