Organizational legitimacy and cross-border acquisition: emerging market multinationals

Abstract

Purpose

Emerging market multinationals often face a variety of legitimacy challenges as they engage in cross-border acquisitions in developed countries, which requires an assortment of legitimacy strategies best aligned with the legitimacy challenges they face. This study advocates for a configurational perspective that examines how different configurations of legitimacy challenges, organizational characteristics, and legitimacy strategies influence the likelihood of deal completion in cross-border acquisitions by emerging market multinational enterprises (EMNEs).

Design/methodology/approach

Based on 328 cross-border acquisition cases by Chinese firms, this study adopts the fuzzy-set qualitative comparative analysis to examine the combined effects of institutional distance, political affinity, equity sought, architecture design, sensitive·industry and state-owned and enterprise (SOE) on cross-border acquisition completion.

Findings

This study identifies six pathways with different configurations for deal completion, suggesting that a deal's overall legitimacy falls at the intersection of the country-level institution and the firm-level characters and strategy evaluations.

Originality/value

This study investigates how nested legitimacy influences cross-border acquisition completion by offering a holistic and configurational understanding of the deal completion of cross-border acquisitions by EMNEs and yields useful insights for future research on cross-border acquisition completion and legitimacy.

Citation

Yang, B., Zhang, S. and Wu, B. (2024), "Organizational legitimacy and cross-border acquisition: emerging market multinationals", Management Decision, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/MD-06-2023-1052