Japanese investors' choice of acquisitions vs. startups in the US: the role of reputation barriers and advertising outlays

Chen, Shih-Fen S.; Zeng, M.

doi:10.1016/j.ijresmar.2003.06.002

Cited by 38 publications

(36 citation statements)

References 39 publications

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“…Specifically, whereas prior studies have argued that acquisitions often come with local brands and market knowledge Delios 1997, 2002;Chen and Zeng 2004;Hennart and Park 1993), we show that the perceived value of these assets, as reflected in the likelihood of acquisition entry, is a function of the perceived need for local marketing adaptation. Furthermore, whereas prior establishment mode studies have explored the direct effects of a prospective subsidiary's relative size, its parent's industry experience, and the host country's development level (Brouthers and Brouthers 2000;Brouthers and Dikova 2010;Chen and Zeng 2004;Hennart and Park 1993;Larimo 2003;Slangen and Hennart 2008), we reveal that these three factors play an important moderating role in the relationship between planned marketing adaptation and mode choices for WOSs. Overall, our findings thus also enrich the understanding of factors that drive MNEs' establishment mode choices.…”

contrasting

confidence: 81%

“…We complement these studies by revealing that MNEs not only attempt to fit their marketing strategy to the external and internal context in which it is implemented but also subsequently fit their mode of foreign establishment to the chosen marketing strategy. Furthermore, we contribute to the small but growing literature stream on the impact of marketing-related factors on foreign expansion decisions (e.g., Chen and Zeng 2004;Mitra and Golder 2002) by showing that marketing adaptation strategy is another factor that affects such decisions.…”

Section: Theoretical Implicationsmentioning

confidence: 98%

“…'s] products/services would be?" (1 = "strongly negative," and 7 = "strongly positive") Chen and Zeng (2004), Hennart and Park (1993) Acquisition restrictions…”

Section: Limitations and Future Research Directionsmentioning

confidence: 99%

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Planned Marketing Adaptation and Multinationals’ Choices between Acquisitions and Greenfields

Slangen

Dikova²

2014

Journal of International Marketing

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International marketing studies have extensively examined the antecedents of firms’ marketing standardization/ adaptation decisions. However, it is unclear whether such decisions, once planned, codetermine the choice between buying and building foreign subsidiaries. Analyzing a sample of 150 foreign entries by Dutch firms, the authors find that the level of marketing adaptation planned for a wholly owned subsidiary is positively related to the likelihood that the subsidiary will be established through an acquisition rather than through a greenfield investment. Moreover, the authors find substantial evidence that this positive relationship is stronger for firms that (1) are establishing relatively larger subsidiaries, (2) have less experience with the industry entered, or (3) are entering less developed countries. The findings show that firms pursuing higher levels of marketing adaptation assign more value to the marketing adaptation advantages of acquisitions over greenfields, especially if the risks associated with implementing the planned adaptation level are high. In addition, firms typically strive for a fit between their international marketing strategy and their mode of foreign establishment.

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confidence: 81%

Section: Theoretical Implicationsmentioning

confidence: 98%

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Planned Marketing Adaptation and Multinationals’ Choices between Acquisitions and Greenfields

Slangen

Dikova²

2014

Journal of International Marketing

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“…On the other hand, partial/majority control acquisitions are motivated by other strategic considerations. Acquirer can procure competitive assets from local firms, such as advanced technologies and well-established brands (Anand & Delios, 2002;Chen & Zeng, 2004). Strategic goals such as rapid entry into growing industries or capacity control in mature industries or consolidation of market power in concentrated sectors can be achieved by partial/ majority control acquisitions (Caves & Mehra, 1986;Hennart & Park, 1993).…”

Section: Stake Of Acquisition and Acquiring Firm Performancementioning

confidence: 99%

Impact of Domestic and Cross-Border Acquisitions on Acquirer Shareholders’ Wealth: Empirical Evidence from Indian Corporate

Rani¹,

Yadav²,

Jain

2014

IJBM

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The present paper compares the impact of domestic acquisitions and cross-border acquisitions on Indian acquirer shareholders' wealth during [2003][2004][2005][2006][2007][2008]. A segregated analysis has also been conducted to measure the impact of stake/control acquired, based on a sample of acquisitions of 268 domestic and 255 target firms across border. Further, this paper also analyses the short-run performance of percentage of stake/control acquired in both type of acquisitions. The stake/control acquired is divided into two categories: (i) complete acquisition and (ii) partial/majority control acquisition. Event study methodology has been conducted to analyse the share price performance of Indian acquirers in short-term. The findings reveal that cross-border as well as domestic acquisitions enhance shareholders' wealth of the acquirer company on the announcement. The results indicate that cross-border acquisitions generate higher returns than domestic acquisitions. Nonetheless, the segregated analysis makes it evident that the shareholders of acquiring firms of complete cross-border acquisitions earn higher abnormal returns (significant at 5 per cent). The abnormal returns are higher (though statistically insignificant) for partial/majority control domestic acquisitions.

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“…Unlike the strategic alternative (greenfield) where a foreign subsidiary is set up from scratch over a longer period of time, CB M&As allow firms to achieve important strategic goals such as speedy entry into a new geographic market or an industry, consolidation of market power in concentrated global industries, firm transformation, taking advantage of a new opportunity or avoiding a possible future threat (Hennart and Park 1993;Collins et al 2009). Furthermore, through CB M&As firms procure assets from indigenous firms such as advanced technologies, reputable or locally recognized brands and valuable human resources (Anand and Delios 2002;Chen and Zeng 2004). Hence, it does not come as a surprise that the value and the number of CB M&As has been on the rise over the years-the total value of CB M&As in 1990 is registered at $98.90 billion while the value in 2012 is reported to be $308.05 billion (UNCTAD 2013).…”

Section: Introductionmentioning

confidence: 99%

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

Arslan

Dikova

2015

Journal of Transnational Management

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ABTRACT: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.

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Japanese investors' choice of acquisitions vs. startups in the US: the role of reputation barriers and advertising outlays

Cited by 38 publications

References 39 publications

Planned Marketing Adaptation and Multinationals’ Choices between Acquisitions and Greenfields

Planned Marketing Adaptation and Multinationals’ Choices between Acquisitions and Greenfields

Impact of Domestic and Cross-Border Acquisitions on Acquirer Shareholders’ Wealth: Empirical Evidence from Indian Corporate

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

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