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.
Emerging Market Multinationals and the Effect of Institutional Distance on Equity Participated in Cross Border Acquisition
