The motives and performance of cross-border acquirers from emerging economies: Comparison between Chinese and Indian firms

Abstract

During the recent decade, the world has witnessed the rapid growth of MNEs from emerging economies. Their increasing participation in cross-border mergers and acquisitions has raised great attention in the extant literature. This study evaluates the value creation from these cross-border transactions from two representative emerging countries, namely China and India, and determines factors that result in the different performance of these international acquisition activities. Crossborder acquisitions conducted by these countries' companies indeed lead to significant shareholder wealth creation. Furthermore, Indian shareholders are more likely to benefit from deals in small cultural distance countries, while Chinese investors gain from the cross-border expansion of manufacturing companies. Location also affects the performance of cross-border acquisitions, with acquisitions into developed countries generating higher returns to shareholders. Our sample consists of 203 Indian and 63 Chinese cross-border deals over the period 2000-2010 and our results hold after controlling for various deal-level and firm-level characteristics.

The remuneration of independent directors in the UK and Italy: An empirical analysis based on agency theory

“…Following previous studies (e.g. Hutzschenreuter, Lewin & Dresel, 2011;Merchant, 2012;Nicholson & Salaber, 2013) we estimated our cross-sectional regressions separately for Italian and UK firms.…”

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

“…We chose Indian and Chinese companies as they belong to two of the largest emerging economies in the world that are institutionally diverse. Also, the globalization trajectory and underlying reasons for internationalization in these two economies are qualitatively different (Nicholson & Salaber, 2013). These economies provide variations in terms of domestic institutional environments (Nayak, 2011;Buckley, Forsans & Munjal, 2012;Kohli & Mann, 2012;Wang et al, 2012;Hemphill & White, 2013;Nicholson & Salaber, 2013).…”

“…Also, the globalization trajectory and underlying reasons for internationalization in these two economies are qualitatively different (Nicholson & Salaber, 2013). These economies provide variations in terms of domestic institutional environments (Nayak, 2011;Buckley, Forsans & Munjal, 2012;Kohli & Mann, 2012;Wang et al, 2012;Hemphill & White, 2013;Nicholson & Salaber, 2013). The two countries also demonstrate differences in terms of the industries that engage in outward investment (Nair, Demirbag & Mellahi, 2015), which is driven by the private sector in India and by state-owned companies in China.…”

“…We used the Thomson One database to obtain data on Indian and Chinese companies that had engaged in cross-border acquisitions. This database has been widely used in studies on the crossborder acquisitions of Indian and Chinese companies (Nicholson & Salaber, 2013). At this stage, we obtained information on more than 500 acquisitions; this was then used to collect the names of the Indian and Chinese acquirers, which were used to search multiple sources for the acquisition information related to these companies.…”

Expatriates, subsidiary autonomy and the overseas subsidiary performance of MNEs from an emerging economy

“…EEMNEs that lack international managerial expertise, international market knowledge and advanced technology may be able to acquire these strategic assets when their subsidiaries are located in host countries with well-developed institutions. Local firms in these host countries are more likely to possess strategic resources needed by EEMENs, but such resources are not usually available in the EEMNEs' domestic markets or in other emerging markets (Nicholson & Salaber, 2013). The asset-seeking behaviour of EEMNEs may reduce the dependence of their subsidiaries on headquarters in such host countries ).…”