Dynamic integration paths of emerging multinational enterprises in advanced markets: Empirical evidence from Chinese acquisitions in Germany

Abstract

Purpose

This paper aims to examine dynamic multi-stage post-merger integration (PMI) evolutions by Chinese multinational enterprises (CMNEs) in the German market and their potential influencing factors.

Design/methodology/approach

A data set was collected from 25 interviews with 21 respondents from six Chinese acquisition cases in Germany, and a comparative multi-case study and content analysis were applied.

Findings

The results reveal that Chinese acquirers take segmented linear integration path in Germany from nearly no integration to organisational integration and then to production integration. It contains three sub-paths: the P-O-O path (partnering–organisational optimisation–production optimisation), the P-P-P path (preservation–organisational preservation–production preservation) and the P-C-C path (preservation–organisational centralisation–production confusion). The initial nearly no integration condition is mainly impacted by asymmetric information and the targets’ strategic positions, whereas different organisational and production integration degrees in mid- and long-term stages are primarily influenced by Chinese acquirers' different dynamic capabilities. Moreover, Chinese acquirers' corporate ownership is not found to be a significant factor that influences CMNEs to take different integration strategies in different PMI stages.

Research limitations/implications

This paper contributes to broaden emerging multinational enterprises’ (EMNEs) PMI theory by adding dynamic perspective and provides suggestions for mergers and acquisitions (M&As) practitioners to identify integration options and avoid integration pitfalls in different integration stages.

Originality/value

Existing works identified that EMNEs prefer to partner with the targets in advanced markets, but lacked a dynamic perspective to disclose whether the partnering strategy would be adjusted or not over time. This study is the first to explore multi-stage integration changes and is one of the few studies that recognise the interaction of the integration strategy with the dynamic capability of the acquiring enterprises.

Citation

Yang, Y. and Lütge, C. (2020), "Dynamic integration paths of emerging multinational enterprises in advanced markets: Empirical evidence from Chinese acquisitions in Germany", Review of International Business and Strategy, Vol. 30 No. 1, pp. 1-23. https://doi.org/10.1108/RIBS-05-2019-0052