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Article
Publication date: 26 April 2013

Xiaojun Du, He Liu, Lingjing Bao and Peng Huang

This paper aims to investigate the relationships between the strategic type of cross‐border mergers and acquisitions (M&As) and enterprise growth, and the moderating role…

Abstract

Purpose

This paper aims to investigate the relationships between the strategic type of cross‐border mergers and acquisitions (M&As) and enterprise growth, and the moderating role of Chinese companies' organizational factors, including organizational structure, organizational experience, cultural distance and relative size.

Design/methodology/approach

The authors, as researchers, have mixed the strategic choice and post‐M&As integration into a comprehensive framework while building the theoretical model ofStrategic Type of Cross‐border M&As‐Organizational Factors‐Enterprise Growth” (ST‐OF‐EG). In this paper, they have empirically examined the model using hierarchical regression by analyzing 76 cross‐borders M&A events of overseas‐listed Chinese companies over the 2000‐2007 period.

Findings

The analysis shows that: related cross‐border M&As are better for enterprise growth than unrelated diversification cross‐border M&As; and among the organizational factors, studied organizational structure and organizational experience show a positive significance in terms of the relationship between the strategic type of cross‐border M&As and enterprise growth. The moderating role of cultural distance and relative size is non‐significant.

Research limitations/implications

In this paper, the moderating effect of cultural distance was found to be insignificant. However, further research is encouraged.

Practical implications

Chinese companies should pay attention to strategic choices before cross‐border M&As. They should expand abroad to markets step by step. They should merge the companies that have the higher relevance on a product, industry or market first. On the basis of specialization, Chinese companies should make themselves stronger and then develop from specialization to proper diversification, which is a robust path to achieve enterprise growth. Besides, Chinese companies should accumulate international experience as soon as possible and organizational structure should match the strategic choice.

Originality/value

This paper would be immensely helpful to Chinese companies to plan their cross‐border M&As strategy in a way that would enhance growth and core‐competence.

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Article
Publication date: 1 April 2003

Georgios I. Zekos

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination…

Abstract

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.

Details

Managerial Law, vol. 45 no. 1/2
Type: Research Article
ISSN: 0309-0558

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Article
Publication date: 28 October 2019

Ching-Chiu Hsu, Jeong-Yang Park and Yong Kyu Lew

In cross-border mergers and acquisitions (M&As), acquirers often fail to achieve the expectations they held when they made the M&A deals. This paper aims to propose that…

Abstract

Purpose

In cross-border mergers and acquisitions (M&As), acquirers often fail to achieve the expectations they held when they made the M&A deals. This paper aims to propose that the risks of cross-border M&As can be mitigated by building and cultivating organizational resilience as a prime means of risk management.

Design/methodology/approach

The research examines risks associated with cross-border M&A and how such risks can be mitigated by developing resilience. It presents dual cases of acquisitions of the biggest branded mobile phone manufacturer in Taiwan.

Findings

The authors find that the acquirer faces multiple risks in cross-border M&A transactions, including financial, strategic and organizational, and process risks that arise from misalignment between the goal of the M&As and the post-acquisition performance of the target firms.

Originality/value

The research provides theoretical insights on organizational resilience and how it can mitigate the specific risks involved in cross-border M&As, thereby developing coherent organizational resilience processes.

Details

Multinational Business Review, vol. 27 no. 4
Type: Research Article
ISSN: 1525-383X

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Article
Publication date: 1 July 2003

Michael A. Hitt and Vincenzo Pisano

Cross‐border mergers and acquisitions present significant opportunities for firms wishing to diversify their activities geographically, learn new knowledge, and gain…

Abstract

Cross‐border mergers and acquisitions present significant opportunities for firms wishing to diversify their activities geographically, learn new knowledge, and gain access to valuable resources. Cross‐border mergers and acquisitions present multiple challenges as well. These include the difficulty of evaluating target firms, cultural and institutional differences, and the liabilities of foreignness among others. We compare acquisitions to enter new markets with other market entry mechanisms (strategic alliances and greenfield ventures), and conclude with suggestions for future research to advance our knowledge of this strategy of increasing importance globally.

Details

Management Research: Journal of the Iberoamerican Academy of Management, vol. 1 no. 2
Type: Research Article
ISSN: 1536-5433

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Article
Publication date: 9 March 2021

Qi Yue, Ping Deng, Yanyan Cao and Xing Hua

Post-acquisition control is a crucial factor affecting acquisition performance. We investigate how post-acquisition control strategy affects cross-border acquisition…

Abstract

Purpose

Post-acquisition control is a crucial factor affecting acquisition performance. We investigate how post-acquisition control strategy affects cross-border acquisition performance of Chinese multinational enterprises (MNEs) through a configurational perspective.

Design/methodology/approach

Based on 70 cross-border acquisition cases by Chinese MNEs, we adopt fuzzy-set qualitative comparative analysis (fsQCA) to study the combined effects of strategic control, operational control, institutional distance, cultural distance, relative capacity and business relatedness on the cross-border acquisition performance.

Findings

On the basis of fuzzy set analysis of multiple interdependent factors, we identify six configurations that are conductive to achieving high cross-border acquisition performance and two configurations that relate to the absence of high performance, thus shedding light on the casually complex nature of performance drivers of acquisitions.

Originality/value

This study provides a holistic, configurational approach to investigating cross-border acquisition performance by emerging market firms. Our results provide some compelling evidence that accounts for the causal complexity of post-acquisition control strategies and acquisition outcomes in the context of emerging economies.

Details

Management Decision, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0025-1747

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Book part
Publication date: 26 August 2014

Xiaoying (Catherine) Zhang and Bruce W. Stening

This paper explores what differentiates success from failure in post-acquisition integration. It seeks to overcome some of the limitations of previous research by adopting…

Abstract

This paper explores what differentiates success from failure in post-acquisition integration. It seeks to overcome some of the limitations of previous research by adopting a more holistic and dynamic examination of the process and by focusing on aspects that can be readily applied in practice. Four cases of mergers and acquisitions (M&A) in the global automobile industry are examined using secondary data and taking a grounded theory approach. The four cases comprise two pairs of successes and two pairs of failures. Two of the pairs comprise established multinational companies, while two others comprise emerging multinational companies’ acquisitions of Korean automakers; in each case, there was one successful M&A and one failure. It is inducted that what differentiates the successful cases from the failures is their different approaches to two common tensions in post-acquisition integration, namely, their approaches to integration strategy and people issues. A two-level framework is proposed in which post-integration is managed simultaneously and dynamically at the strategic and people levels. These inductive findings, if verified by a more broadly based empirical examination, will extend M&A theory by providing a more integrated and dynamic approach to post-acquisition integration, in which strategic and people perspectives are jointly taken into account and interact with each other, thereby creating value for both acquiring and acquired firms.

Details

Advances in Mergers and Acquisitions
Type: Book
ISBN: 978-1-78190-836-5

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Article
Publication date: 9 February 2015

Monica Yang

The purpose of this paper is to adopt a multi-level approach to investigate what factors shape the content of emerging market firms’ foreign market entry decisions…

Abstract

Purpose

The purpose of this paper is to adopt a multi-level approach to investigate what factors shape the content of emerging market firms’ foreign market entry decisions, particularly the ownership participation in cross-border mergers and acquisitions (M&As). In addition, the author would like to know if companies from emerging markets that possess higher (or lower) ownership in cross-border M&As receive higher valuation in the market.

Design/methodology/approach

Using panel data of cross-border M&As by emerging market firms from 2000 to 2012, the author tests the hypothesized effects of the independent variables on the level of ownership participation; and uses a standard event study methodology to assess the market reaction of a particular cross-border M&A deal.

Findings

The author finds that a country-level factor (institutional distance), an industry-level factor (industry unrelatedness) and a firm-level factor (board concentration) have significant impact on ownership participation in cross-border M&As. The author also finds that investors do give high valuation to those emerging market firms that chose high ownership participation in cross-border M&As. However, the author did not finds the support for the relationship between ownership participation and cultural distance. Neither did the author finds the support for the relationship between ownership participation and board independence.

Originality/value

This study enhances the understanding of conditions under which the level of ownership participation in cross-border M&As would increase (decrease) and how the market reacts to high (low) ownership participation of cross-border M&As by emerging market firms.

Details

Management Decision, vol. 53 no. 1
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 14 May 2019

Lijun Dong, Xin Li, Frank McDonald and Jiaguo Xie

The purpose of this paper is to draw attention to the significant lower completion rate of mergers and acquisitions (M&As) by firms from emerging economies (EEs) (China in…

Abstract

Purpose

The purpose of this paper is to draw attention to the significant lower completion rate of mergers and acquisitions (M&As) by firms from emerging economies (EEs) (China in particular) compared with firms from advanced economies, and identify the country- and industry-level factors that affect the completion of cross-border M&As by Chinese firms.

Design/methodology/approach

This study explores the effects of economic, cultural and institutional distances and target firms in technology- and knowledge-intensive industries on the completion of cross-border M&As by Chinese firms. It also examines the interplay between distance factors and technology- and knowledge-intensive industries on cross-border M&A completion. This study adopts a quantitative approach and is based on a sample of 768 announced cross-border M&A deals by firms in China between 2000 and 2015.

Findings

The results indicate that economic distance increases the likelihood of the completion of cross-border M&As when the target is in a more developed economy than China, but decreases when the target is in a less developed economy. Cultural and institutional distances have a significant, negative impact on the completion of cross-border M&As. In addition, target technology-intensive industries have a significant direct negative effect on cross-border M&A completion and moderate the relationship between the distance factors and the likelihood of cross-border M&A completion.

Research limitations/implications

The results reveal factors that affect the completion of cross-border M&As by emerging market firms (EMFs). Further research, however, is needed to discover how distance factors affect how EMFs find, evaluate and negotiate international bids. To broaden the scope of the research, data for firms from other EEs would also be required.

Originality/value

The study expands the literature that considers the effects of major distances on cross-border M&A completion. In addition, the importance of defining and measuring distances in the context of cross-border M&As is highlighted. Finally, the study expands knowledge on how cross-border M&As affect the internationalization strategies of EMFs by conceptualizing and testing how target industries affect cross-border M&A completion.

Details

Baltic Journal of Management, vol. 14 no. 3
Type: Research Article
ISSN: 1746-5265

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Article
Publication date: 8 January 2021

Ying Qi, Xiangyang Wang, Yujia Li, Gongyi Zhang and Huiqi Jin

The study adopts congruence theory to explore the structure of inter-organizational compatibility and its structural effects on knowledge transfer in cross-border merger…

Abstract

Purpose

The study adopts congruence theory to explore the structure of inter-organizational compatibility and its structural effects on knowledge transfer in cross-border merger and acquisitions (M&As).

Design/methodology/approach

This paper built a moderated-mediation model that presented the relationship between inter-organizational compatibility and knowledge transfer. Regression analysis was conducted with 182 samples from China to examine the model and hypotheses.

Findings

The results indicate that inter-organizational compatibility is a four-dimensional construct comprising culture, strategy, routine and knowledge. Additionally, inter-organizational compatibility has structural effects on knowledge transfer. Specifically, routine compatibility mediates the relationships between cultural compatibility and knowledge transfer and between strategic compatibility and knowledge transfer. Moreover, the mediating roles are moderated by knowledge compatibility.

Originality/value

This study updates the construct and provides a comprehensive and fresh understanding of inter-organizational compatibility. Additionally, it presents the structural effects of inter-organizational compatibility on knowledge transfer.

Details

Management Decision, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 3 October 2016

K.S. Reddy, En Xie and Yuanyuan Huang

Drawing attention to the significant number of unsuccessful (abandoned) cross-border merger and acquisition (M&A) transactions in recent years, the purpose of this paper…

Abstract

Purpose

Drawing attention to the significant number of unsuccessful (abandoned) cross-border merger and acquisition (M&A) transactions in recent years, the purpose of this paper is to analyze three litigated cross-border inbound acquisitions that associated with an emerging economy – India, such as Vodafone-Hutchison and Bharti Airtel-MTN deals in the telecommunications industry, and Vedanta-Cairn India deal in the oil and gas exploration industry. The study intends to explore how do institutional and political environments in the host country affect the completion likelihood of cross-border acquisition negotiations.

Design/methodology/approach

Nested within the interdisciplinary framework, the study adopts a legitimate method in qualitative research, that is, case study method, and performs a unit of analysis and cross-case analysis of sample cases.

Findings

The critical analysis suggests that government officials’ erratic nature and ruling political party intervention have detrimental effects on the success of Indian-hosted cross-border deals with higher bid value, listed target firm, cash payment, and stronger government control in the target industry. The findings emerge from the cross-case analysis of sample cases contribute to the Lucas paradox – why does not capital flow from rich to poor countries and interdisciplinary M&A literature on the completion likelihood of international takeovers.

Practical implications

The findings have several implications for multinational managers who typically involve in cross-border negotiations. The causes and consequences of sample cases would help develop economy firms who intend to invest in emerging economies. The study also offers some implications of M&A for telecommunications and extractive industries.

Originality/value

Although a huge amount of extant research investigates why M&A fail to create value to the shareholders during the public announcement and post-merger stages, there is a significant dearth of research on the causes and consequences of delayed or abandoned national and international deals. The paper fills this knowledge gap by discussing an in-depth cross-case analysis of Indian-hosted cross-border acquisitions.

Details

Journal of Organizational Change Management, vol. 29 no. 6
Type: Research Article
ISSN: 0953-4814

Keywords

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