Do international acquisitions by emerging-economy firms create shareholder value? The case of Indian firms

Abstract

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The impact of leadership on organizational ambidexterity and employee psychological safety in the global acquisitions of emerging market multinationals

“…Over the last few decades, acquisitions by emerging-market multinationals' (EMMs) have seen a rapid increase (Bonaglia, Goldstein & Mathews, 2007;Demirbag, Glaister & Tatoglu;Luo & Tung, 2007;Gammeltoft, 2008;Aybar & Ficici, 2009;Gubbi, Aulakh, Ray, Sarkar & Chittoor, 2010;UNCTAD, 2011;Kohli & Mann, 2012); such growth kept gathering speed during the financial crisis years, despite the value of assets in developed economies becoming greatly depreciated (Rao- Nicholson & Salaber, 2015). In addition to their typical resource-and market-seeking motives, EMMs also undertook cross-border acquisitions to access high-technology and managerial practices and processes (Huang & Khanna, 2003;Purushothaman, 2004;Kumar, 2008;Gubbi et al, 2010;Hattari & Rajan, 2010).…”

“…In addition to their typical resource-and market-seeking motives, EMMs also undertook cross-border acquisitions to access high-technology and managerial practices and processes (Huang & Khanna, 2003;Purushothaman, 2004;Kumar, 2008;Gubbi et al, 2010;Hattari & Rajan, 2010). Although cross-border acquisitions are typically more complex (Aguilera & Dencker, 2004), the extant narrative on EMMs global acquisitions generally focuses on the performance of such acquisitions without critically examining the underlying processes that can explain the performance peculiarities (Rottig, 2013;Rottig, Reus & Tarba, 2014).…”

Desempenho de fusões e aquisições cross border: análise empírica do caso brasileiro

“…In this case, the potential financial performance for the acquirer company would be, in part, consumed by the incremental cost paid to the acquiree: that is what the hubris hypothesis holds in the context of M&As (Seth et al, 2000). However, Gubbi et al (2010) argue that companies from emerging companies use this form of internationalization in order to acquire strategic assets in various markets, with the purpose of overcoming their latecomer and foreignness disadvantages and becoming more competitive during institutional transition periods. Those advantages -combined with learning potential and access to valuable informational assets -would more than compensate for the high premiums paid for companies from developed environments.…”

“…Over the years, the focus moved to the resource-based view and the organizational learning perspective (Barkema & Vermeulen, 1998). Institutional-and sociocultural-based theories, which analyze the impact of cultural distance, regulatory differences, and institutional contingencies on corporate restructuring events, are increasingly numerous nowadays (Dikova, Sahib, & Witteloostuijn, 2010;Gubbi, Aulakh, Ray, Sarkar, & Chittoor, 2010;Lin, Peng, Yang, & Sun, 2009;Nadolska & Barkema, 2007;Reus & Lamont, 2009), as more traditional analyses focusing on financial-economic and market aspects have proved insufficient to apprehend the entire complexity inherent to a cross-border acquisition (King, Dalton, Daily, & Covin, 2004).…”

“…Cartwright and Schoenberg (2006) mention the fact that longitudinal studies of M&A are also infrequent and conducted in developed countries only. Gubbi et al (2010) examined the value creation process in cross-border acquisitions by Indian companies. Lin et al (2009) Moreover, we found that the institutional environment of, and the cultural distance from, the country of the acquired company affect the performance of cross-border M&As, and that the acquiring company's international experience in M&As exerts an inverted-U shape influence on that performance.…”