Defying Distance? Cross-Border Acquisitions by Emerging-Economy Firms

Abstract

We argue that emerging-economy fi rms ' international location

EMNEs venturing into advanced economies: Findings from comparative cases of two Indian MNEs

“…However, since the turn of the century, OFDI by EMNEs is also by driven resource seeking (especially by Chinese state‐owned firms) and strategic‐asset seeking (as is the case with many CBAs, by BRIC [Brazil, Russia, India, China]‐origin EMNEs) motives. These emerging motives mirror the aspirations of these EMNEs to seek hitherto nonexistent FSAs that are essential for their international competitiveness and internationalization (Aulakh, ; Boateng, Qian, & Tianle, ; Chari & Shaikh, ; Cuervo‐Cazurra, ; Guillén & Garcia‐Canal, ; Luo & Tung, ; Peng, ; Ramamurti, ; Yang & Deng, ). In doing so, EMNEs have behaved in ways where their lack in classical but vital FSAs (technology resources; knowledge resources; tacit competitive advantages; mature, proprietary processes) is not seen as a barrier to their internationalization but rather fuels their aspirations to internationalize (Child & Rodrigues, ).…”

Corporate governance and returns to emerging economy firm acquisitions in tax havens: An empirical test on Indian firms

“…Target firms in the sample are from 81 countries. All deal‐related data for the study are obtained from SDC platinum, a premier source of data for studies on Mergers and Acquisitions (Chari & Shaikh, ). All firm data and stock data are from the Center for Monitoring the Indian Economy, which is a reputed source of data that has been used extensively in prior research (Elango & Pattnaik, ; Gubbi et al, ).…”

“…Some prior research has observed greater abnormal returns if the target firm is in an advanced economy (Gubbi et al, ). Therefore, we control for advanced economy target firm using a dummy variable that takes a value of 1 if the target firm is in a country classified by the IMF as an advanced economy and 0 otherwise (Chari & Shaikh, ). Acquisitions in the same industry may have greater synergistic value.…”

“…Cross‐border acquisition (CBA) is among the more frequently used strategies through which emerging economy firms expand their presence overseas (Chari & Shaikh, ; Luo & Tung, ). A number of scholars have, therefore, been interested in investigating whether these strategies are successful, often by evaluating whether the announcement of such acquisitions results in positive returns to stockholders of the acquiring firms.…”

International M&A Strategies: The Research in the Context of Emerging Markets

“…При осуществлении зарубежных M&A компании из стран с развивающейся экономикой часто выбирают нетрадиционный путь интернационализации, а именно выходят на рынки, дистанционно далекие от домашнего рынка, не имея опыта ведения зарубежных инвестиций [Mathews, 2006;Luo, Tung, 2007]. В [Chari, Shaih, 2017] предлагается следующее объяснение этого феномена: МНК из стран с развивающейся экономикой при выборе географического направления M&A ориентируются не на краткосрочные потери из-за большой дистанции между странами, а на дол госрочные выгоды от получения необходимых ресурсов. Таким образом, негативный эффект, ассоциирующийся с дистанцией между странами, будет меньше для МНК из стран с развивающейся экономикой, нежели для МНК из развитых стран при выборе географического направления M&A.…”