Learning by doing: Cross-border mergers and acquisitions

Collins, Jamie D.; Holcomb, Tim R.; Certo, S. Trevis; Hitt, Michael A.; Lester, Richard H.

doi:10.1016/j.jbusres.2008.11.005

Cited by 178 publications

(159 citation statements)

References 63 publications

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“…We therefore agree with the extant researchers' evidences that previous acquisition experience in overseas deal making has a positive impact on deal completion (Collins et al, 2009;Francis et al, 2014;Meschi & Métais, 2013). For instance, Collins et al (2009) found that prior experience with international acquisitions is more predictive of subsequent overseas acquisitions than prior domestic acquisition experience. Zhu (2011) suggested that overseas deals require more sophisticated and advanced managerial skills and expertise to control the firm internationalization process.…”

Section: Firm-specific Determinantssupporting

confidence: 91%

“…Further, Vodafone's previous experience in overseas deal making truly helped the company officials while overcoming entry-mode barriers in developing countries and reaching the conclusion. We would support this streak to the organizational learning theory: learning-by-doing and learning from prior acquisition experience (Collins, Holcomb, Certo, Hitt, & Lester, 2009;Francis, Hasan, Sun, & Waisman, 2014;Lin, Peng, Yang, & Sun, 2009). For instance, Collins et al (2009), andMeschi andMétais (2013) found that previous acquisition experience has a positive impact on overseas deal completion and such experience usually influenced by company's overseas lookup/ establishment.…”

Section: Analysis Of Vodafone-hutchison Casementioning

confidence: 71%

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Why Do Cross-Border Merger/Acquisition Deals Become Delayed, or Unsuccessful? A Cross-Case Analysis in the Dynamic Industries

Reddy

2015

SSRN Journal

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The purpose of this paper is to analyze three litigated cross-border inbound acquisitions that associated with Asian emerging market-India, namely Vodafone-Hutchison and Bharti Airtel-MTN deals in the telecommunications industry, and Vedanta-Cairn India deal with oil and gas exploration industry. To do so, we adopt a legitimate method in qualitative research, that is, case study method and thereby perform a unit of analysis and cross-case analysis. We suggest that government officials' erratic nature and ruling political party influence were more in foreign inward deals that characterize higher bid value, listed target company, cash payment, and stronger government control in the industry. Importantly, the liability of foreignness and liability of localness was found to be severe in Indian-hosted deals that describe higher valuation, cash payment and dynamic industry. We eventually propose implications of mergers and acquisitions for extractive industries thus to enhance productivity and improve welfare measures during post-integration phase. JEL Classification: G34

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Section: Firm-specific Determinantssupporting

confidence: 91%

Section: Analysis Of Vodafone-hutchison Casementioning

confidence: 71%

Why Do Cross-Border Merger/Acquisition Deals Become Delayed, or Unsuccessful? A Cross-Case Analysis in the Dynamic Industries

Reddy

2015

SSRN Journal

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“…However, previous research has not specifically considered how difference of experience gained from disparate countries affects its value to the targeted strategy [32]. Because of differences in the institutional environments among countries, knowledge for a country that creates competitive advantage may not generate the same advantage in another nation [21,30,33]. Therefore, while not incorporated in previous research, we argue that a unique value of director FDI experience exists when this experience is specific to the host country.…”

Section: Specific Learning From Director Fdi Experience Within Focal mentioning

confidence: 83%

Does Board Experience Matter? Evidence from Foreign Direct Investment

Lai¹,

Chen²

2012

JSSM

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This study contributes to the growing literatures on the importance of board expertise to their provision of counsel for management. By demonstrating that when announcing overseas investments, how a firm alleviates its liabilities of foreignness by board members possessing relevant experiences, the present work addresses the long-standing issue of what renders board the most effective. Drawing on expertise literature, we exam the efficacy of both director specific and heterogeneous experience, assessed by foreign market entry mode and targeted host country. The empirical results yield support for favorable impacts of both types of director experience. This finding corroborates the transition of board's role from "passively" ratifying executive proposals, as predicted by agency theory, to "actively" instructing executives, as argued by resource dependence theory. The resource provision function of a board is further supported by greater benefits of director experience in situations of limited firm resources, assessed by executives' associated experience. Finally, we find that directors who have operated independently from the CEO but without relevant experience cannot have significant influence on investment outcome. Our research result contributes to corporate governance research predominated by agency theory for the past decades, which presumes director independence as the foremost prerequisite for board effectiveness.

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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).…”

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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Learning by doing: Cross-border mergers and acquisitions

Cited by 178 publications

References 63 publications

Why Do Cross-Border Merger/Acquisition Deals Become Delayed, or Unsuccessful? A Cross-Case Analysis in the Dynamic Industries

Why Do Cross-Border Merger/Acquisition Deals Become Delayed, or Unsuccessful? A Cross-Case Analysis in the Dynamic Industries

Does Board Experience Matter? Evidence from Foreign Direct Investment

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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