Do innovative emerging market cross-border acquirers create more shareholder value? Evidence from India

Beule, Filip De; Sels, Annabel

doi:10.1016/j.ibusrev.2015.09.008

Cited by 47 publications

(25 citation statements)

References 118 publications

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“…Ordinary sources and benefits of firm-specific advantages This review finds that various ordinary FSAs have been identified in EM MNEs, such as capital, technologies, marketing capabilities, brand equity, R&D intensity, and management competencies (De Beule & Sels, 2016;Lee, Hong, & Makino, 2016a;Liang, Lu, & Wang, 2012;Nguyen & Rugman, 2015;. This is contrary to previous research claiming that EM MNEs lack "real" FSAs due to challenges in their home country (Madhok & Keyhani, 2012).…”

Section: Discussionmentioning

confidence: 58%

Firm-specific advantages: a comprehensive review with a focus on emerging markets

Adarkwah

Malonæs

2020

Asia Pac J Manag

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We consolidate and comprehensively review the international business (IB) literature on the firm-specific advantages (FSAs) of emerging market multinational enterprises (EM MNEs). We do so through a systematic examination of 88 empirical and conceptual articles published in top-ranked IB journals between 2011 and 2018. The results reveal that in the past decades, EM MNEs have acquired several of the same FSAs as their counterparts in developed countries (developed country enterprises or DC MNEs) - financial resources, technologies, marketing capabilities, brand equity, R&D intensity, and management competencies. However, more recently, EM MNEs have developed additional unique FSAs in the form of managerial capabilities - to cope with competition in uncertain and constantly changing environments; easy access to cheaper capital; a stronger commitment to networks, such as those with diaspora communities; and, political connections. These additional FSAs have catalyzed the internationalization of EM MNEs. Our study also shows that some hurdles remain in the IB literature on FSAs. For instance, while IB scholars agree that EM MNEs have different investment motives depending on whether they invest in other emerging economies or developed economies, scholars are silent on the exact FSAs necessary to make EM MNEs investments in the respective economies successful. To advance the IB literature, we present some promising future research areas and challenge scholars to pursue further empirical studies on the FSAs of EM MNEs.

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Section: Discussionmentioning

confidence: 58%

Firm-specific advantages: a comprehensive review with a focus on emerging markets

Adarkwah

Malonæs

2020

Asia Pac J Manag

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“…This availability of internal resources provides them with superior access and makes them more capable of capacity creation and being internationally competitive. Beule and Sels (2016) find that Indian business group firms have positive impact on shareholder's value in case of cross-border acquisitions. As such we would expect that the negative effect of cultural distance on long run buy and hold returns to cross-border acquisitions will be less when the acquiring firm belongs to a business group in India.…”

Section: H1mentioning

confidence: 79%

Valuation effects of cultural disparity on cross border mergers: The evidence from India

Tewari

Banerjee²,

De³

2019

IJFBS

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The object of this study is to explore the effect of cultural distance on both the long run and short run performance of cross border mergers and acquisitions undertaken by Indian acquiring firms. We utilize buy and hold returns (BHAR), cumulative abnormal returns (CAR) and cross-sectional regression analysis in our study. Adopting the traditional Hofstede measure of cultural distance and other pertinent variables, commonly used to measure cultural differences, we document a negative and statistically significant influence of cultural distance on Indian cross-border M&As and corroborate some of other findings reported in prior research. Also, we find that the BHAR is nevertheless higher when the acquisitions are friendly, paid for 100% cash, and the acquiring firm is large, older and belongs to a business group. The inclusion of the variable ‘business group’ along with industry relatedness and acquirer size provides valuable insights into the Indian cross border acquisition landscape, wherein business groups dominate to a great extent.

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“…Second, MNEs often seek local joint venture (JV) partners or acquisition targets to deal with institutional and informational gaps between their homeand host-country business environments. MNEs liabilities of foreignness (Zaheer, 1995) can include costs to overcome host economy entry barriers, access to local business networks, mitigate political risks, and so on (De Beule & Sels, 2016;Gubbi & Elango, 2016). Foreign MNEs entering JV agreements with host-country BG firms can be blindsided by the income shifting and other BG tactics not expected of free-swimming firms (Perkins, Morck, & Yeung, 2014).…”

Section: Groups and Internationalizationmentioning

confidence: 99%

Business groups and the study of international business: A Coasean synthesis and extension

2021

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This paper harmonizes the business group literature in international business and across relevant fields within a unified theoretical framework. Business groups (firms under common control but with different, if overlapping, owners) are economically important in much of the world. Business groups’ economic significance co-evolves with their economies' institutions and market environments, patterns of particular interest to international business scholars. The vast literature on business groups raises discordant perspectives. This paper first proposes a unifying definition and provides a list of stylized historical observations on business groups across different parts of the world. It then develops a Coasean framework to harmonize seemingly disparate views from the literature by building on recent surveys and the stylized historical patterns of business groups. We enlist two concepts – fallacies of composition/decomposition and time inconsistency – to harmonize these perspectives. This yields a theoretical framework for understanding business groups that mobilizes concepts long-used to understand multinational enterprises: the economy's market and hierarchical transaction costs, openness, and their dynamic interactions. We then apply this framework to globalization and business group internationalization. This work leads to an overarching research agenda encompassing seemingly inconsistent prior work.

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Do innovative emerging market cross-border acquirers create more shareholder value? Evidence from India

Cited by 47 publications

References 118 publications

Firm-specific advantages: a comprehensive review with a focus on emerging markets

Firm-specific advantages: a comprehensive review with a focus on emerging markets

Valuation effects of cultural disparity on cross border mergers: The evidence from India

Business groups and the study of international business: A Coasean synthesis and extension

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