Springboard internationalization by emerging market firms: Speed of first cross-border acquisition

Kumar, Vikas; Singh, Deeksha; Purkayastha, Anish; Popli, Manish; Gaur, Ajai

doi:10.1057/s41267-019-00266-0

Cited by 165 publications

(148 citation statements)

References 121 publications

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“…The rigidity of their processes due to which firms cannot transfer tacit knowledge as required, is likely to result in the negative relationship between age and size and OFDI. Moreover, these results conform to those in the extant literature on foreign investments by EMNEs, which suggest that smaller and younger firms are more entrepreneurial and have less organizational inertia, and are hence, more likely to undertake OFDI (Kumar et al, 2020;Ray et al, 2018;Madhok and Keyhani, 2012). We also observe that R&D intensity has a positive and significant relationship with OFDI, suggesting that firms that invest in R&D develop significant competitive advantages.…”

Section: Model Specification and Resultssupporting

confidence: 88%

“…Dummy variables to control the potential effects of macroeconomic conditions and industry dummies (at two-digit NIC level) to control industry effects were also used. Finally, there is extensive literature arguing that firm's prior profitability may influence its international expansion decisions, we hence, controlled for this by measuring prior profitability as the percentage of earnings before depreciation, interest, and taxes to total assets (Gómez-Mejía et al, 2010;Ray et al, 2018;Kumar et al, 2020).…”

Section: Control Variablesmentioning

confidence: 99%

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Does Knowledge from Home Markets Boost Outward Foreign Direct Investments of Emerging Economy Multinationals? Evidence from Indian Family EMNEs

Mondal

Gadepalli

2020

ABR

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Despite increasing research on multinationals from emerging economies (EMNEs), our understanding of the antecedents of their international expansion is still limited. In this study, we seek to examine whether knowledge gained from operating in their complex and diverse domestic markets deter or aid the outward foreign direct investments of EMNEs. As family firms are dominant in emerging economies, we further explore how heterogeneity within family firms moderate this relationship. We conduct our investigations using a proprietary longitudinal dataset comprising 213 EMNEs from India featuring in the S&P Bombay Stock Exchange (BSE) 500 index covering a six-year period from 2007-08 to 2012-13, of which 175 were family EMNEs and find supporting evidence for our theoretical predictions.

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Section: Model Specification and Resultssupporting

confidence: 88%

Section: Control Variablesmentioning

confidence: 99%

Does Knowledge from Home Markets Boost Outward Foreign Direct Investments of Emerging Economy Multinationals? Evidence from Indian Family EMNEs

Mondal

Gadepalli

2020

ABR

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“…Plenty of research sheds light on the impacts of international M&As on acquiring firms' performance, especially for EMEs that are facing more pressures to engage in international M&As with the development of globalization [2,8]. Previous literature reveals that M&As create value for acquirers through three kinds of synergy, namely operational synergy, financial synergy and collusive synergy [15].…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

“…However, almost all the previous research focuses on those M&As processes of acquirers and oversees their influence on acquirers' external stakeholders (e.g., rival firms), especially on the sustainability of those stakeholders. Further studies should shed light on this topic since not all firms are equally aggressive in realizing value from international M&As [1,2,8] and sustainability are playing the role of a prerequisite for success [3].…”

Section: Introductionmentioning

confidence: 99%

How Do International M&As Affect Rival Firm’s Sustainable Performance? —Empirical Evidence from an Emerging Market

Yin

Zhou

et al. 2020

Sustainability

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International mergers and acquisitions (M&As) have been increasingly used by emerging market enterprises (EMEs) as a springboard for strategic assets to overcome latecomer disadvantages and build sustainable competitive advantages. While current literature only focuses on the M&As’ impacts on acquirers, little is known about the impacts of EMEs’ international M&As on their external stakeholders, such as rival firms. Based on the longitudinal data covering 325 large international M&As completed by Chinese public manufacturing firms during 2009–2015, empirical results show that international M&As at the industry level have significant negative influence on the sustainable performance of acquirers’ rivals, and these negative relationship will be accentuated when the international M&As are horizontal M&As, when rivals are carrying out cost leadership strategy, and when those M&As are completed in the high-tech industry. This study enriches the literature of international M&As and the economic pillar of sustainability by pushing current research toward rival’s perspective and denotes that firms need to consider the potential negative impact on the sustainability of their outside stakeholders (e.g., other firms and whole industry). It also generates practical implications for firms to actively deal with potential negative effects of competitors’ international M&As on their sustainable performance, especially those players in the high-tech industry.

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“…According to the springboard perspective, the acquisition of foreign firms is the main means of accessing state-of-the-art knowledge (Luo & Tung, 2007), but there have been recent calls in the literature to shift the focus on other investment modes such as greenfield investments (Kumar, Singh, Purkayastha, Popil, & Gaur, 2019;Luo & Tung, 2018). Many scholars have assumed that acquisitions are made to obtain strategic assets such as technology and brands and that they can offer fast access to the business network of an acquired firm, while greenfield investments, which entail building facilities from scratch, have thus far been mainly ascribed to market-seeking motives (Anderson & Sutherland, 2015;Rui & Yip, 2008;Klossek, Linke, & Nippa, 2012).…”

Section: Theoretical Backgroundmentioning

confidence: 99%

Catching up by hiring: The case of Huawei

Schaefer

2020

J Int Bus Stud

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Hiring experts in centers of state-of-the-art technology is an important way in which a multinational enterprise (MNE) can gain competitive advantage, and yet use of this mechanism remains under-researched. This study uses the case of a Chinese MNE that recently achieved a leading position in the telecommunications market: Huawei Technologies. Taking the perspective of Huawei's offshore hires, I find that greenfield investments contributed to overcoming liabilities of origin and outsidership in the global telecommunications industry. Nevertheless, even now that Huawei has caught up with industry incumbents, its output capabilities remain dependent on the innovation capabilities of its offshore experts.

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Springboard internationalization by emerging market firms: Speed of first cross-border acquisition

Cited by 165 publications

References 121 publications

Does Knowledge from Home Markets Boost Outward Foreign Direct Investments of Emerging Economy Multinationals? Evidence from Indian Family EMNEs

Does Knowledge from Home Markets Boost Outward Foreign Direct Investments of Emerging Economy Multinationals? Evidence from Indian Family EMNEs

How Do International M&As Affect Rival Firm’s Sustainable Performance? —Empirical Evidence from an Emerging Market

Catching up by hiring: The case of Huawei

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