Purpose: The purpose of this study was to investigate how knowledge flow and productivity affect the absorptive capacity of target firms in emerging markets.Design/methodology/approach: We used self-administered questionnaires to measure absorptive capacity, knowledge flow and productivity constructs. The sample comprised individuals who were employees of firms that completed acquisitions between 2015 and 2017. The acquisitions were publicly announced and the target firms were all in emerging markets.Findings/results: Firstly, our results confirmed the multidimensional nature of absorptive capacity. Secondly, we found a positive correlation between a target firm’s knowledge flow and productivity and its absorptive capacity. Thirdly, our results indicated that knowledge flow and operational processes will support the introduction and integration of external knowledge into a target firm. Therefore, understanding the absorptive capacity of target firms is central to the ability of new and existing knowledge to be assimilated.Practical implications: The realisation of the strategic intent of an acquisition is dependent on effective knowledge flow, supported by efficient communication and operational processes. The target firm’s absorptive capacity is, therefore, a key consideration for acquiring firms. Understanding this will be useful for firms to consider acquisitions of target firms in emerging markets and could potentially enhance their chances of success.Originality/value: This study contributes to the limited body of research on emerging market merger and acquisition activity. It responds to the call for further research to be conducted on emerging markets and the role of absorptive capacity in realising the strategic intent of acquisitions.

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Learning outcomes The learning outcome is to understand the difference between correlation and causation. Case overview/synopsis The case is set during the period of the COVID-19 pandemic, globally a search for effective treatments were underway. An initial forerunner that was being considered was Bacille Calmette-Guerin (BCG), given its effectiveness in the treatment of tuberculosis and other pulmonary-related infections. While there were a lack of randomised controlled trials, initial data from publicly related secondary data sources indicated that, in countries with BCG inoculation policies, the severity of the spread and mortality of COVID-19 was muted. The case is centered around the available information on BCG and COVID-19. Complexity academic level Post-graduate students learning statistics as part of a degree programme. The case assumes no prior statistics knowledge and therefore is aimed at teaching the difference between correlation and causation. Subject code CSS 7: Management Science Supplementary materials Teaching Notes are available for educators only.