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Title: Entry and access to competencies abroad: Emerging market firms versus advanced market firms
Authors: De Beule, Filip ×
Elia, Stefano
Piscitello, Lucia #
Issue Date: 14-Jun-2014
Publisher: Wiley in cooperation with Thunderbird, American Graduate School of International Management
Series Title: Journal of International Management vol:20 issue:2 pages:137-152
Abstract: This article examines the acquisition behavior of multinational companies from emerging markets (EMNCs) compared to multinational companies from advanced markets (AMNCs). Specifically, we relate the governance mode (i.e. the degree of commitment) to exogenous and endogenous uncertainty. As a result of endogenous uncertainty due to their liability of origin, EMNCs are likely to acquire less control, which is exacerbated by exogenous uncertainty when acquiring targets in high-tech sectors. Furthermore, EMNCs experience a higher propensity to control the local partner the higher the institutional distance with the host country, since they enjoy a better institutional environment when they invest in advanced countries and, hence, they are less likely to need a local partner. To test our hypotheses, we develop an econometric analysis applied to foreign acquisitions in Italy between 2001 and 2010 and we study the degree of control of AMNCs as compared to EMNCs. Our results confirm that EMNCs acquire less control than AMNCs, especially in high-tech industries, while institutional distance in trade and investment freedom effectively increase the probability to undertake full acquisition for EMNCs as opposed to AMNCs.
ISSN: 1075-4253
Publication status: published
KU Leuven publication type: IT
Appears in Collections:Department of International Business, Strategy and Economics (IBSE), Campus Carolus Antwerp
Faculty of Economics and Business (FEB) - miscellaneous
× corresponding author
# (joint) last author

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