Inorganic growth of technology sector firms in emerging markets: Influence of firm-specific factors in Indian firms’ M&A activities

Abstract

Purpose

Emerging economies and technology firms in these economies have witnessed significant increase in mergers and acquisitions (M&A) activities in recent years. The purpose of this paper is to conduct an empirical research on Indian technology firms and analyze the influence of firm-specific factors on firms’ M&A decisions.

Design/methodology/approach

A set of 372 Indian firms in the technology sector have been studied for the period 2001-2011, a decade when this sector has seen maximum number of M&A transactions.

Findings

The results show that financially strong, low-debt firms with high market capitalization are the typical acquirers in this segment and they tend to be serial acquirer too.

Originality/value

Contrary to established findings in developed economies, the authors find that Indian technology firms’ acquisition decisions are not associated with their R&D activities, opening up scope for investigations on role of technology assets in emerging market firms’ acquisition decisions.

Citation

Das, A. and Kapil, S. (2015), "Inorganic growth of technology sector firms in emerging markets: Influence of firm-specific factors in Indian firms’ M&A activities", International Journal of Emerging Markets, Vol. 10 No. 1, pp. 52-72. https://doi.org/10.1108/IJOEM-06-2012-0057