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

Rao-Nicholson, Rekha and Salaber, Julie 2013. The motives and performance of cross-border acquirers from emerging economies: Comparison between Chinese and Indian firms. International Business Review. 22 (6), p. 963–980. doi:10.1016/j.ibusrev.2013.02.003

TitleThe motives and performance of cross-border acquirers from emerging economies: Comparison between Chinese and Indian firms
AuthorsRao-Nicholson, Rekha and Salaber, Julie
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. Cross-border 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.

KeywordsCross-border acquisitions; Short-term performance; China; India; Competitive advantage; Cultural distance
JournalInternational Business Review
Journal citation22 (6), p. 963–980
ISSN0969-5931
Year2013
PublisherElsevier
Accepted author manuscriptIBR2013 open.pdf
Digital Object Identifier (DOI)doi:10.1016/j.ibusrev.2013.02.003
Publication dates
Published17 Mar 2013

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