The Influence of Liabilities of Origin on EMNE Cross-Border Acquisition Completion

Madhavan, Shobhana; Gupta, Deepak

doi:10.1057/978-1-137-54468-1_7

Cited by 5 publications

(15 citation statements)

References 75 publications

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“…Moreover, studies have shown that LOR has led to negative perceptions of legitimacy on the part of foreign stakeholders toward EMNEs. For instance, Madhavan and Gupta (2017) argued that negative stereotypes related to LOR result in a low level of acceptance and credibility for Indian MNEs in host countries. He and Zhang (2018) pointed out that negative institutional images of a home country form additional cognitive and normative challenges from foreign stakeholders toward EMNEs that are attempting to obtain legitimacy, thus influencing their cross-border acquisitions.…”

Section: Liabilities Of Originmentioning

confidence: 99%

“…However, while there has been a substantial increase in the number of studies that articulate either the consequences of or strategies for overcoming LOR, little attention has been paid to the country-, industry-and firm-level heterogeneity that affects LOR suffered by EMNEs in host countries. At the same time, the current LOR research is mainly theoretical and qualitative; there are few quantitative studies to operationalize the concept of LOR (for exceptions, see He and Zhang, 2018;Madhavan and Gupta, 2017;Marano et al, Cross-border acquisition completion 2017). Specifically, Madhavan and Gupta (2017) measured LOR using EMNEs' global inexperience and institutional distance, concepts that have also been used in traditional "liability of foreignness" research (Kostova and Zaheer, 1999;Zaheer, 1995); that is, their work failed to capture the essential features of LOR, especially the stereotypical aspects of LOR.…”

Section: Liabilities Of Originmentioning

confidence: 99%

“…At the same time, the current LOR research is mainly theoretical and qualitative; there are few quantitative studies to operationalize the concept of LOR (for exceptions, see He and Zhang, 2018;Madhavan and Gupta, 2017;Marano et al, Cross-border acquisition completion 2017). Specifically, Madhavan and Gupta (2017) measured LOR using EMNEs' global inexperience and institutional distance, concepts that have also been used in traditional "liability of foreignness" research (Kostova and Zaheer, 1999;Zaheer, 1995); that is, their work failed to capture the essential features of LOR, especially the stereotypical aspects of LOR. He and Zhang (2018) and Marano et al (2017) adopted the institutional quality of the home country to measure the LOR that EMNEs suffer in developed countries.…”

Section: Liabilities Of Originmentioning

confidence: 99%

“…Competence dimension of liability of origin and the completion of cross-border acquisitions Previous studies on LOR have argued that EMNEs may suffer from disadvantages including a lack of core competence and are perceived as providers of inferior products and services because of institutional voids at home (Fiaschi et al, 2017;Marano et al, 2017;Pant and Ramachandran, 2012). However, in recent years, many emerging market economies have thrived, which has influenced the image of emerging economy markets in various foreign countries (Madhavan and Gupta, 2017;Pant and Ramachandran, 2012). In particular, China has made great progress in various industries and has drawn attention from other countries (Li and Xiong, 2021;Witt, 2019).…”

Section: Cross-border Acquisition Completionmentioning

confidence: 99%

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How does liability of origin influence cross-border acquisition completion? Evidence from Chinese firms

Jiang

Yang

et al. 2022

CMS

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Purpose The environment of international business (IB) and the capabilities of emerging market multinational enterprises (EMNEs) as well as their home countries have changed significantly, leading to some new features of liability of origin (LOR). This paper aims to extend the LOR literature by particularly focusing on the LOR of Chinese multinational enterprises (MNEs) and by taking into account the heterogeneity among industries and across individual MNEs. Design/methodology/approach Based on the stereotype content model and organizational legitimacy perspective, this study explores how LOR influences Chinese MNEs’ cross-border acquisition completions. Several hypotheses were tested by using a binary logistic regression model with panel data techniques based on data of 780 Chinese MNEs’ acquisition deals between 2008 and 2018. Findings The results of this study show that when the competence dimension of China’s LOR is perceived as high in the host country, Chinese MNEs are less likely to complete cross-border acquisitions. Moreover, deals are less likely to be completed when the warmth dimension of China’s LOR is perceived to be low. Global experience and the foreign-listed status of individual Chinese MNEs can alter the relationship between the LOR and deal completions. Originality/value This study advances and enriches the LOR research. It shows that a high level of competence in the home country has led to LOR for Chinese MNEs rather than the low level of competence proposed by existing LOR studies; and the LOR for Chinese MNEs is also determined by the perceived low level of warmth in the home country resulting from the geopolitical conflicts between two countries. In addition, the LOR suffered by EMNEs could vary based on certain industry- and firm-level characteristics. The findings of this study provide important practical implications for emerging economy governments and for firms intending to go abroad.

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Section: Liabilities Of Originmentioning

confidence: 99%

Section: Liabilities Of Originmentioning

confidence: 99%

Section: Liabilities Of Originmentioning

confidence: 99%

Section: Cross-border Acquisition Completionmentioning

confidence: 99%

See 2 more Smart Citations

How does liability of origin influence cross-border acquisition completion? Evidence from Chinese firms

Jiang

Yang

et al. 2022

CMS

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show abstract

“…Chinese and Indian (Madhavan & Gupta, 2017) firms face 'country of origin/liability of origin' effects. This will increase especially for Chinese firms due to the worldwide health impact of Covid-19, and increasing negative perceptions of community members of Chinese made goods, and firms, which may affect trade.…”

Section: Problemsmentioning

confidence: 99%

New and novel business paradigms in and from China and India

Paul

Menzies

Zutshi

et al. 2020

EBR

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Purpose This paper aims to identify and discuss new and novel business paradigms in China and India. In addition, this study examines the new business environment in those countries (2020 onwards) in the context of COVID 19 and explores the challenges and opportunities in the post COVID period. Design/methodology/approach Based on content analysis, this study discusses contemporary topics such as innovation, exports, foreign direct investment, technology, social capital, board independence as part of corporate governance and explores novel themes such as consumer behaviour in regard to luxury brands and women entrepreneurship in an emerging country context in this paper. Findings It was found that there are several novel paradigms in the context of China and India. A paradigm shift in diplomatic relations has taken place as an aftermath of COVID-19 in the world. Originality/value This paper explores most of the unique dimensions of new and novel paradigms in the context of China and India.

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Interplay of national and firm environmental, social, and governance performances: Reshaping multinational enterprises' employer attractiveness across home and host countries

Kuo,

Chien,

Kao

2024

Corp Soc Responsibility Env

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In this study, we emphasize the pivotal role of national environmental, social, and governance (ESG) performance, encompassing both host and home countries, in shaping the implications of firm‐specific ESG performance for the attractiveness of multinational enterprises (MNEs) as preferred employers. Our research puts forth three hypotheses. First, we propose that superior ESG performance by MNEs will exhibit a positive relationship with their perceived appeal as employers. Second, we theorize that higher national ESG performance in the home country will amplify the positive relationship between an MNE's ESG performance and its attractiveness as an employer. Lastly, we posit that superior national ESG performance in the host country will similarly strengthen the positive association between an MNE's ESG performance and its desirability as an employer. The empirical data robustly supports these hypotheses.

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The Influence of Liabilities of Origin on EMNE Cross-Border Acquisition Completion

Cited by 5 publications

References 75 publications

How does liability of origin influence cross-border acquisition completion? Evidence from Chinese firms

How does liability of origin influence cross-border acquisition completion? Evidence from Chinese firms

New and novel business paradigms in and from China and India

Interplay of national and firm environmental, social, and governance performances: Reshaping multinational enterprises' employer attractiveness across home and host countries

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