Influences of Institutional Distance and MNEs’ Host Country Experience on the Ownership Strategy in Cross-border M&As in Emerging Economies

Arslan, Ahmad and Dikova, Desislava (2015) Influences of Institutional Distance and MNEs’ Host Country Experience on the Ownership Strategy in Cross-border M&As in Emerging Economies. Journal of Transnational Management, 20 (4). pp. 231-256. ISSN 1547-5778 DOI https://doi.org/10.1080/15475778.2015.1093784

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Abstract

This paper analyzes ownership strategy in cross-border mergers and acquisitions (CB M&As) undertaken by the multinational enterprises (MNEs) in emerging economies. We use new institutional economics and organizational learning theories to hypothesize and empirically analyze the influence of formal and informal institutional distance, and MNEs’ host country experience on the MNEs’ choice between full and partial CB M&As. The empirical analysis is based on a sample of 184 CB M&As launched by MNEs in emerging economies. Our empirical results revealed that high formal and informal institutional distances lead to a preference for partial CB M&As however, MNEs’ host country experience moderated the relationship between institutional distance and the MNEs’ choice between full and partial CB M&As. We found that MNEs with prior investment experience in the focal emerging market opted for full CB M&As over partial CB M&As despite high formal and informal institutional differences.

Item Type: Article
Uncontrolled Keywords: Cross-border M&As, Full Acquisition, Partial Acquisition, Institutional Distance, MNE Host Country Experience, and Emerging Economies.
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Divisions: Business and Management
Date Deposited: 23 Feb 2016 15:45
URI: http://repository.edgehill.ac.uk/id/eprint/7116

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