Dong, L, Li, X, McDonald, F orcid.org/0000-0003-4621-0524 et al. (1 more author) (2019) Distance and the Completion of Chinese Cross-Border Mergers and Acquisitions. Baltic Journal of Management, 14 (3). pp. 500-519. ISSN 1746-5265
Abstract
Purpose
The purpose of this paper is to draw attention to the significant lower completion rate of mergers and acquisitions (M&As) by firms from emerging economies (EEs) (China in particular) compared with firms from advanced economies, and identify the country- and industry-level factors that affect the completion of cross-border M&As by Chinese firms.
Design/methodology/approach
This study explores the effects of economic, cultural and institutional distances and target firms in technology- and knowledge-intensive industries on the completion of cross-border M&As by Chinese firms. It also examines the interplay between distance factors and technology- and knowledge-intensive industries on cross-border M&A completion. This study adopts a quantitative approach and is based on a sample of 768 announced cross-border M&A deals by firms in China between 2000 and 2015.
Findings
The results indicate that economic distance increases the likelihood of the completion of cross-border M&As when the target is in a more developed economy than China, but decreases when the target is in a less developed economy. Cultural and institutional distances have a significant, negative impact on the completion of cross-border M&As. In addition, target technology-intensive industries have a significant direct negative effect on cross-border M&A completion and moderate the relationship between the distance factors and the likelihood of cross-border M&A completion.
Research limitations/implications
The results reveal factors that affect the completion of cross-border M&As by emerging market firms (EMFs). Further research, however, is needed to discover how distance factors affect how EMFs find, evaluate and negotiate international bids. To broaden the scope of the research, data for firms from other EEs would also be required.
Originality/value
The study expands the literature that considers the effects of major distances on cross-border M&A completion. In addition, the importance of defining and measuring distances in the context of cross-border M&As is highlighted. Finally, the study expands knowledge on how cross-border M&As affect the internationalization strategies of EMFs by conceptualizing and testing how target industries affect cross-border M&A completion.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2019, Emerald Publishing Limited. This is an author produced version of a article published in Baltic Journal of Management. Uploaded in accordance with the publisher's self-archiving policy. |
Keywords: | Mergers and acquisitions; Completion; Rules of the game; Economic, cultural and institutional distance |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > International Business Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 11 Apr 2019 13:25 |
Last Modified: | 28 Jun 2019 14:35 |
Status: | Published |
Publisher: | Emerald |
Identification Number: | 10.1108/BJM-06-2018-0223 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:144739 |