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Extending the springboard perspective with the resource dependence theory, the authors posit that cross-border mergers and acquisitions (M&As) are a new channel for emerging economy firms (EEFs) to enhance their technology capabilities. This study aims to examine the impact of cross-border M&As initiated by EEFs on their technology augmentation vis-à-vis matched domestic M&A cases and investigate the factors influencing the difference in post-merger innovation capability.

This paper estimates the post-acquisition innovation capability of acquirers from emerging economies (EEs) that engage in cross-border M&As. To remove possible selection bias, the authors leverage a difference-in-difference-style approach in combination with a matched sample constructed by pairing each cross-border M&A case with a similar domestic deal. The data set contains 266 cross-border M&As and 266 matched domestic M&A deals between 2003 and 2011, whereby acquirers are based in 6 EEs and targets are in 36 countries consisting of both EEs and advanced economies (AEs).

The present empirical results show that cross-border M&As engaged by EEFs are an important engine for improving EEFs’ innovation capability through technology augmentation. The main empirical results are as follows. First, compared with matched domestic acquirers with similar characteristics, EE cross-border M&As have a positive effect on innovation capability. Second, the positive effect of the EEFs’ cross-border M&As relative to the matched domestic M&As on innovation capability is driven largely by cross-border M&As with targets in AEs. Third, the increase in post-M&A innovation capability of the EE cross-border acquirers comes mainly from deals where targets are based in countries with relatively superior human capital and innovation capability than those of the acquirers.

To the best of the authors’ knowledge, this study is the first systematic study of whether cross-border M&As serve as an effective channel of technology augmentation for EE acquirers compared to matched domestic acquirers with similar characteristics.

The purpose of this paper is to examine the impact of inter-group conflicts on the trust toward the acquirer and then further on cooperation intention after acquisitions in cross-border mergers and acquisitions (M&As), in the lens of the social classification theory. Two types of conflicts (realistic conflicts and symbolic conflicts) and a mediating mechanism (trust toward the acquirer) exhibit different effects on cooperation intention. The research further examines two moderating coping strategies (localizing management and assigning trustworthy expatriate managers) and tests their effectiveness in promoting trust toward the acquirer and increasing cooperation intention in cross-border M&As.

The research hypotheses were empirically tested in the context of post-acquisition of Chinese companies' cross-border M&As. In total, 600 questionnaires were provided to the research participants of 37 acquired firms/units from advanced economies of 12 Chinese companies, and 209 valid questionnaires were collected (the response rate is 34.83%). Confirmatory factor analysis was conducted to verify data validity and hierarchical multiple regression analyses were employed to test relational and moderating effects.

This research demonstrates that both realistic and symbolic conflicts can reduce the intention to cooperate, but the latter does not have a significant influence. The results also uncover that whether employees from acquired firms trust in their acquirers mediates the relationship between realistic conflicts and cooperation intention. Moreover, management localization (a measurement of whether local/original managers are retained with a high degree of freedom and autonomy after M&As) and trustworthiness of expatriate managers (a measurement of whether the assigned expatriate managers is trustworthy) positively moderate the relation between realistic conflicts and trust toward the acquirer. In addition, trust toward the acquirer mediates the interaction of realistic conflicts and management localization on the cooperation intention of the acquirers' employees.

This study examines how inter-organizational conflicts influence trust toward the acquirer and then cooperation intentions in the context of Chinese companies' M&A behavior of targets from developed countries and gain supportive evidence, which enriches the literature on the management of international M&As. By introducing two management localization and trustworthiness of expatriate managers into the model, the research deepens our knowledge of how to build trust toward the acquirer in cross-border M&As.

In this paper, the knowledge-based view of the firm is applied to theoretically elucidate and empirically examine the influence of target industry growth on premium payments in cross-border acquisitions. This study aims to extend internally driven Mergers and Acquisitions research efforts of acquirers to industry contingencies of targets by analyzing cross-border acquirers located within the group of seven (G7) countries.

This study’s investigation covers 209 cross-border acquisitions from 2012 to 2019 undertaken by firms located within the G7 countries. This paper used generalized estimation equations method to test the hypotheses applying Gaussian distribution for the dependent variable, an identity link function, exchangeable correlation structure and robust standard errors.

This study’s results reveal that target industry growth determines premiums. Furthermore, this study shows that acquirer industry growth, as well as acquirer slack, moderates this relationship. This study is built on the notion that industry contingencies influence premiums even when target firms are based in foreign countries.

To the best of the authors’ knowledge, unlike other studies, this is the first to explicitly focus on premiums for multiple cross-border acquisitions by hand selecting nine years of industry sale figures for 53 industries separately in each of the G7 nation countries (leading to 371 separate downloads of data samples). This study contends that industry growth of cross-border targets matters for premium payments.

The purpose of this paper is to study the differences in the internationalization process of firms from emerging economies and the impact of their international expansion related choices on the nature of technological innovations developed by these firms. Specifically, the authors compare two principal perspectives on internationalization – the incremental internationalization process (slow, gradually increasing commitments using greenfield investments to similar host countries) and the springboard perspective (aggressive, rapidly increasing commitments using mergers and acquisitions to advanced host countries).

Building on key differences between the incremental internationalization and springboard perspectives, the authors argue that differences in the speed and mode of entry, as well as the interaction between the mode of entry and location of internationalization, will lead to differences in the types of technologies (mature versus novel) developed by emerging economy firms. The authors examine the hypotheses using panel data from 1997 to 2013 on emerging economy multinationals (EMNEs) from the Indian bio-pharmaceutical industry.

The findings suggest that firms internationalizing at higher speeds and using cross-border M&As tend to have innovations in mature technologies. The interesting findings can be explained by the challenges faced by emerging economy firms in experiential learning and the assimilation of external knowledge. In addition, the authors find that internationalization to technologically advanced countries weakens the relationship between cross-border M&As and innovation in mature technologies, suggesting that direct learning from technologically advanced environments may help alleviate the assimilation challenges of cross-border M&As.

The authors advance literature on EMNE internationalization by comparing the impact of their choice of internationalization approaches (incremental internationalization or springboard approach) on their innovation performance. The authors contribute to literature on EMNEs that has focused on the determinants of internationalization by identifying the learning implications of internationalization. The authors contribute to the nascent stream of literature on the level of innovation and catching up by EMNEs by performing a fine-grained analysis of the nature of technology innovation.

Based on the business network view and cultural friction theory, this study aims to construct a theoretical model of the cultural friction effect and its mechanism of action during the transformation of Chinese enterprises from outsiders to insiders with equal and legitimate competitive status.

Data including cross-border M&As of Chinese enterprises in 17 major countries or regions and domestic M&As in China and host countries from 1982 to 2016 were used to test the hypotheses.

This study finds that the presence of cultural friction in cross-border M&As diminishes the probability that Chinese firms will adopt a more rapid pace of entry into the core position of the host country's business network.

First, this study has theoretical implications for studying Chinese firms' cross-border M&As from the perspective of the host country. Second, the theoretical construction of this paper reveals the double meaning from outsidership to insidership. Third, this study responds to the academic initiative that a more comprehensive and appropriate study should include factors such as the structural characteristics of the home or host market and stakeholders.

The paper aims to reveal the attitude of the Russian competition authorities towards cross-border mergers involving foreign buyers. The study addresses the following question: Is the probability of Russian competition authorities' intervention significantly different when a foreign buyer takes part in the merger? This is the key test to reveal whether competition authorities gravitate towards “economic nationalism” or “promotion of foreign investments”.

The discrete choice model is applied to the dataset of 7,607 merger cases investigated by the Russian competition authorities between 2012 and 2017. The probability of competition authorities' intervention, such as merger correction by using remedies or deal rejection, is used as a measure of special attention.

The study finds out favoritism patterns of the regulator with regard to foreign companies. In particular, the deals involving a foreign buyer had less chance of intervention, i.e. imposition of remedies, from national competition authorities. The sanctions period does not moderate the probability of approval of a cross-border merger with foreign buyers by the Russian competition authorities.

The paper contributes to merger control literature by addressing the political economy issues. It discovers that, besides regulation by the law, there are hidden motives, such as protectionism or favoritism of foreign companies, which could drive the regulator's decision. Therefore, the studies of cross-border mergers provide an opportunity to investigate the political issues of merger control through the identification of a special attitude to foreign companies and analysis of regularities that might explain such a policy.

Over the last decade, the sustainability concept has progressively enticed both practitioners and researchers around the world. Despite the research interest in the role of sustainability in mergers and acquisitions (M&As), a number of critical questions remained unanswered. The aim of this chapter is to review and synthesize the existing research on sustainability and M&As in the fields of management, international business, finance, accounting, and economics and identify avenues for further research. The literature review has been organized according to the process perspective of M&As, that is, the pre-M&A and post-M&A phases. The review of the literature revealed that most of the existing literature used proxies of sustainability such as environment, social, and governance (ESG) rating or corporate social responsibility (CSR) and attempted to examine the relationship between ESG/CSR performance with stock market reaction and returns. While a small but growing number of studies examined the role of sustainability in M&As, there are scopes for further research. This chapter puts forward a research agenda that calls for a more granular examination of the role of sustainability in pre-M&A phases such as the target selection process, that is, due diligence and negotiation process in domestic and cross-border M&As. Moreover, future studies should investigate the role of sustainability during the post-M&A phase, for example, integration of sustainability practices during the post-M&A stage.

This study investigates the impact of economic policy uncertainty (EPU) on the inflows of foreign direct investment (FDI), specifically focusing on two components of FDI: greenfield investment and cross-border mergers and acquisitions (M&As). The objective is to analyze how EPU influences these two types of FDI differently. It further investigates how this impact varies during the Covid-19 pandemic.

Data were collected from various sources such as the United Nations Conference on Trade and Development (UNCTAD), Policy uncertainty index and the World Bank database to create a sample covering 213 countries from 2003 to 2020. The research objective was accomplished by utilizing the panel ordinary least squares (OLS) with fixed effects estimator.

The results demonstrate that countries that experience more EPU observe a decrease in FDI inflows. The authors also observe that FDI inflows have reduced due to the Covid-19 pandemic. Furthermore, the findings show that the impact of EPU is different between two components of FDI during the Covid-19 period. Specifically, the authors find that when uncertainty is trigged by the health crisis, there is an increase in FDI inflows in the form of cross-border M&As only. One possible reason is that cross-border M&As investors may take advantage of institutional quality (such as corruption) as an “efficient grease” to quickly expedite the entry process, which ultimately leads to a rise in cross-border M&As investment.

Overall, the study attempts to demonstrate empirical evidence about how EPU affects FDI inflows with an up-to-date dataset. In addition, the authors illustrate the significance of breaking down total FDI inflows into two sub-categories when examining the relationship between EPU and FDI. Third, the authors prove that the influence of EPU on FDI inflows differ significantly among different types of FDI components.

The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-02-2023-0114

This study takes a dyadic approach to explaining merger and acquisition (M&A) deal outcomes. Acknowledging the socio-cognitive (e.g. intangible and macro-environmental) idiosyncrasies, the authors theorize that some acquirer–target dyads have a superior ability to complete complex relational transactions in an M&A deal. Specifically, deals are successful when an acquirer and a target: are similar considering their sectoral characteristics, have contextually-informed deal-making competencies, and are familiar with one another given their sectoral and institutional features.

This study uses logistic regression analysis to examine how sectoral and institutional characteristics in the acquiring and target company dyads relate to the likelihood of merger and acquisition deal completion.

Analyzing a sample of 37,560 M&A deals, the authors find empirical evidence in support of the dyadic to deal completion. The authors find that sectoral similarity and institutional familiarity in an M&A dyad can predict the likelihood of deal completion. Specifically, service multinational acquirers are more competent than their manufacturing counterparts in general, and in same-sector and same-country deals in particular. In contrast, service sector acquirers also are at a relative disadvantage vis-à-vis their manufacturing counterparts in cross-national deals.

Considering the theoretical and managerial implications, the authors identify new avenues for future research on service and manufacturing M&A dyads that can deepen the knowledge of inter-firm transaction processes.

First, the authors draw on the socio-cognitive, behavioral, and relational models to explain M&A deal process in both domestic and cross-border settings. Drawing on service vis-à-vis manufacturing sector business models, the authors predict deal completion. Second, the authors propose that familiarity between the acquiring and target companies in the form of sectoral and cross-national factors becomes pivotal to the inter-firm processes. Finally, the authors empirically demonstrate how inter-firm dynamics in a dyad can pose complex deal-making challenges, which make some acquirers especially susceptible to contextual shocks.

The authors investigate the effects of Chinese acquirer’s chief executive officer (CEO) risk preference on mergers and acquisitions (M&A) payment method and the moderating roles played by acquirer’s ownership, industry relatedness and whether the M&A is cross-border.

Using 4,624 worldwide M&A deals conducted by Chinese firms from 2009 to 2021, the authors conduct multiple linear regression and ordered probit regression. And comprehensive indexes constructed based on the observed features of acquirer’s CEOs are used to be the proxy for CEO risk preference.

The results show that the higher-level Chinese acquirer’s CEO risk preference is overall positively associated with using more stock in payment. Moreover, the above relationship is strengthened if the ownership of the acquirer is state-owned.

The authors highlight the importance of the non-economic factors and demonstrate a relationship between the Chinese acquirer’s CEO risk preference and the M&A payment method, providing support for and enriching the upper echelons theory (UET). Moreover, the unique risk priorities of Chinese acquirers’ CEOs are revealed.