Birds of a feather flock together: ownership in cross-border acquisitions by emerging multinationals

Domı́nguez, Beatriz; Fuentelsaz, Lucio; Garrido, Elisabet; González, Minerva

doi:10.1108/ccsm-09-2019-0173

Cited by 3 publications

(1 citation statement)

References 84 publications

(141 reference statements)

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“…Furthermore, knowledge-intensive firms in different geographies may differ in the way they operate, because of knowledge stickiness (Dominguez et al ., 2021; Shane, 1993; Stuart and Sorenson, 2003). The literature on the knowledge-based view of the firm suggests that knowledge spills over to other firms but becomes localized in a geographic region (Almeida and Kogut, 1999; Singh and Marx, 2013).…”

Section: Theory and Hypothesesmentioning

confidence: 99%

To integrate or not? Understanding knowledge integration of target firm

Varshney

2024

CCSM

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PurposeTechnology acquisition is a common phenomenon of acquiring external knowledge, but we have a limited understanding of conditions in which the acquirer integrates the target or not. On one hand, the acquirer may have a policy to integrate the target to benefit from its prior knowledge. On the other hand, the target may face challenges in continuing its knowledge creation and the acquirer may want to provide it autonomy to not disrupt it. This paper aims to identify conditions in which targets tend to be less integrated after acquisitions, allowing them to maintain more autonomy and contribute more to knowledge creation.Design/methodology/approachWe test our arguments in the empirical setting of the global biopharmaceutical industry using a difference-in-difference approach on a longitudinal dataset of matched patents. We examine self-cites received by patents belonging to acquirers and the targets before and after the acquisitions.FindingsWe find that, on average, the targets’ prior patents do not receive more self-cites after the acquisition. We conclude that this is because their R&D activities are disrupted, suggesting a higher level of post-acquisition integration. However, more nuanced findings reveal that it may not be the case all the time. When the target has more research experience, is international or is specialized in complementary technologies, prior patents of targets continue to receive more self-cites after the acquisition. It indicates that the targets in such conditions continue knowledge creation, suggesting a lower level of post-acquisition integration.Originality/valueOur findings contribute to post-acquisition integration research. While post-acquisition integration downside is common, we present conditions in which such a downside may be less likely. We highlight that the context of an acquisition may be an important determinant of the extent of integration of the target. Moreover, we supplement the integration research (cultural, structural and human resource and leadership perspectives of integration) by adding a knowledge-based perspective to it. Such dynamics have important implications for acquirers and targets in deriving value from the acquisition.

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Section: Theory and Hypothesesmentioning

confidence: 99%

To integrate or not? Understanding knowledge integration of target firm

Varshney

2024

CCSM

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Institutional distances and equity-based entry modes: a systematic literature review

2023

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The institutional distance between home and host countries influences the benefits and costs of entry into markets where a firm intends to conduct business. Entry mode choice is a function of a firm's strategy to increase its competitiveness, efficiency, and control over resources that are critical to its operations. This systematic literature review aims to explain the influence of institutional distances on equity-based entry modes in international markets. The present study contributes to the literature on international business using institutional theory to address the entry mode, and by analyzing the nature of the constructs used to measure the influence institutional distances have on the choice of entry mode into foreign markets.

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Intellectual Property Protection and Degree of Ownership of Emerging-market Multinational Enterprises: The Moderating Role of Home-country Government Support

Souza,

Alcântara,

Calegario

2024

Global Business Review

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In this article, we aimed to investigate the influence of the distance of intellectual property protection (IPP) between the home and host countries in the degree of ownership of subsidiaries of emerging-market multinational enterprises (EMNEs) and the moderating role of the financial support of the home-country government in the relationship between the IPP distance and the degree of ownership. We applied a binominal panel probit model to analyze data from 296 subsidiaries of 32 Brazilian multinationals in 40 host countries during the period 2006–2015. The results indicate that Brazilian multinationals tend to opt for full ownership in host countries with a positive IPP distance and that this tendency is maintained with financial support from the home-country government. The results support the importance of formal institutions to EMNEs’ strategic decisions and contribute to the discussion of the importance of IPP for international business. This study seeks to contribute to the literature by analysing the link between the degree of ownership of EMNEs and the distance of IPP between the home country and the host countries, an under-analysed topic. In addition, the present study also contributes to the advancement of research on EMNEs by examining the Latin American context.

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Birds of a feather flock together: ownership in cross-border acquisitions by emerging multinationals

Cited by 3 publications

References 84 publications

To integrate or not? Understanding knowledge integration of target firm

To integrate or not? Understanding knowledge integration of target firm

Institutional distances and equity-based entry modes: a systematic literature review

Intellectual Property Protection and Degree of Ownership of Emerging-market Multinational Enterprises: The Moderating Role of Home-country Government Support

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