Explaining the surge in M&A as an entry mode: home country and cultural influences
Agyenim Boateng, Min Du, Yan Wang, Chengqi Wang, Mohammad F. Ahammad
Purpose: The purpose of this paper is to examine the trends, patterns and the impact of cultural and home country macroeconomic influences on Chinese cross-border mergers and acquisitions (CBM&A) as foreign entry strategy for the period of 1998-2011. Design/methodology/approach: Using three regression models, namely, ordinary least squares, the random effects and fixed effects to examine the impact of home country macroeconomic and cultural factors on CBM&A outflows as an entry mode of Chinese firms. The authors check the robustness of the results using system GMM. Findings: The findings suggest that CBM&A as a preferred mode of market entry provides a means for obtaining strategic resources to develop competitive advantages for the Chinese emerging market firms. The regression results indicate that home country macroeconomic and cultural variables, including gross domestic product (GDP), liquidity, interest rates, inflation, acquisitions in resource seeking sectors and cultural distance play an important role in explaining the trends of CBM&A outflows by the Chinese firms. Research limitations/implications: The results imply that government support to emerging market multinational enterprises (EMEs) to acquire strategic assets and economic policies in the home country play an important role in shaping international expansion behaviour of EMEs through CBM&A. The study demonstrates that outward investments of EMEs are partly a function of the level of economic policies and government support at home. The limitation is that most of the Chinese CBM&A transactions took place in Asia/Pacific locations. Future studies appear warranted if new data become available. Originality/value: The study demonstrates how the institutions, strategic asset seeking with government support and economic policies in the home country play important role in shaping international expansion behaviour of emerging market enterprises through CBM&A thereby contributing to the political economy literature and institutional theory. More importantly, the study shows that the level of economic policies and development such as GDP, money supply, interest rates, inflation of the home country are important for EME growth in the international market.
International Marketing Review
https://doi.org/10.1108/IMR-10-2014-0330
Chinese firms
10.1108/IMR-10-2014-0330
Boateng, A et al (2016) Explaining the surge in M&A as an entry mode: home country and cultural influences
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Entry Mode Business & Economics
Cultural Influences Business & Economics
Home Country Business & Economics
Emerging Market multinationals Business & Economics
Economic Policy Business & Economics
Multinational Enterprises (MNEs) Business & Economics
Government Support Business & Economics
Strategic Assets Business & Economics
Boateng, A., Du, M., Wang, Y., Wang, C., & Ahammad, M. F. (2017). Explaining the surge in M&A as an entry mode: home country and cultural influences. International Marketing Review, 34(1), 87-108. https://doi.org/10.1108/IMR-10-2014-0330
Boateng, Agyenim ; Du, Min ; Wang, Yan ; Wang, Chengqi ; Ahammad, Mohammad F. / Explaining the surge in M&A as an entry mode: home country and cultural influences. In: International Marketing Review. 2017 ; Vol. 34, No. 1. pp. 87-108.
@article{c7e1a69fad154c86950893b3c8bc9802,
title = "Explaining the surge in M&A as an entry mode: home country and cultural influences",
abstract = "Purpose: The purpose of this paper is to examine the trends, patterns and the impact of cultural and home country macroeconomic influences on Chinese cross-border mergers and acquisitions (CBM&A) as foreign entry strategy for the period of 1998-2011. Design/methodology/approach: Using three regression models, namely, ordinary least squares, the random effects and fixed effects to examine the impact of home country macroeconomic and cultural factors on CBM&A outflows as an entry mode of Chinese firms. The authors check the robustness of the results using system GMM. Findings: The findings suggest that CBM&A as a preferred mode of market entry provides a means for obtaining strategic resources to develop competitive advantages for the Chinese emerging market firms. The regression results indicate that home country macroeconomic and cultural variables, including gross domestic product (GDP), liquidity, interest rates, inflation, acquisitions in resource seeking sectors and cultural distance play an important role in explaining the trends of CBM&A outflows by the Chinese firms. Research limitations/implications: The results imply that government support to emerging market multinational enterprises (EMEs) to acquire strategic assets and economic policies in the home country play an important role in shaping international expansion behaviour of EMEs through CBM&A. The study demonstrates that outward investments of EMEs are partly a function of the level of economic policies and government support at home. The limitation is that most of the Chinese CBM&A transactions took place in Asia/Pacific locations. Future studies appear warranted if new data become available. Originality/value: The study demonstrates how the institutions, strategic asset seeking with government support and economic policies in the home country play important role in shaping international expansion behaviour of emerging market enterprises through CBM&A thereby contributing to the political economy literature and institutional theory. More importantly, the study shows that the level of economic policies and development such as GDP, money supply, interest rates, inflation of the home country are important for EME growth in the international market.",
keywords = "mergers and acquisitions , Chinese firms ",
author = "Agyenim Boateng and Min Du and Yan Wang and Chengqi Wang and Ahammad, {Mohammad F.}",
note = "AAM uploaded 1-4-16 by academic; 24m embargo Acceptance date 6-8-15 (from email proof of acceptance provided by academic 12-4-16, copy in SAN) ET ",
doi = "10.1108/IMR-10-2014-0330",
journal = "International Marketing Review",
publisher = "Emerald Publishing Limited",
Boateng, A, Du, M, Wang, Y, Wang, C & Ahammad, MF 2017, 'Explaining the surge in M&A as an entry mode: home country and cultural influences', International Marketing Review, vol. 34, no. 1, pp. 87-108. https://doi.org/10.1108/IMR-10-2014-0330
Explaining the surge in M&A as an entry mode: home country and cultural influences. / Boateng, Agyenim; Du, Min ; Wang, Yan; Wang, Chengqi; Ahammad, Mohammad F.
In: International Marketing Review, Vol. 34, No. 1, 13.02.2017, p. 87-108.
T1 - Explaining the surge in M&A as an entry mode: home country and cultural influences
AU - Boateng, Agyenim
AU - Du, Min
AU - Wang, Yan
AU - Wang, Chengqi
AU - Ahammad, Mohammad F.
N1 - AAM uploaded 1-4-16 by academic; 24m embargo Acceptance date 6-8-15 (from email proof of acceptance provided by academic 12-4-16, copy in SAN) ET
N2 - Purpose: The purpose of this paper is to examine the trends, patterns and the impact of cultural and home country macroeconomic influences on Chinese cross-border mergers and acquisitions (CBM&A) as foreign entry strategy for the period of 1998-2011. Design/methodology/approach: Using three regression models, namely, ordinary least squares, the random effects and fixed effects to examine the impact of home country macroeconomic and cultural factors on CBM&A outflows as an entry mode of Chinese firms. The authors check the robustness of the results using system GMM. Findings: The findings suggest that CBM&A as a preferred mode of market entry provides a means for obtaining strategic resources to develop competitive advantages for the Chinese emerging market firms. The regression results indicate that home country macroeconomic and cultural variables, including gross domestic product (GDP), liquidity, interest rates, inflation, acquisitions in resource seeking sectors and cultural distance play an important role in explaining the trends of CBM&A outflows by the Chinese firms. Research limitations/implications: The results imply that government support to emerging market multinational enterprises (EMEs) to acquire strategic assets and economic policies in the home country play an important role in shaping international expansion behaviour of EMEs through CBM&A. The study demonstrates that outward investments of EMEs are partly a function of the level of economic policies and government support at home. The limitation is that most of the Chinese CBM&A transactions took place in Asia/Pacific locations. Future studies appear warranted if new data become available. Originality/value: The study demonstrates how the institutions, strategic asset seeking with government support and economic policies in the home country play important role in shaping international expansion behaviour of emerging market enterprises through CBM&A thereby contributing to the political economy literature and institutional theory. More importantly, the study shows that the level of economic policies and development such as GDP, money supply, interest rates, inflation of the home country are important for EME growth in the international market.
AB - Purpose: The purpose of this paper is to examine the trends, patterns and the impact of cultural and home country macroeconomic influences on Chinese cross-border mergers and acquisitions (CBM&A) as foreign entry strategy for the period of 1998-2011. Design/methodology/approach: Using three regression models, namely, ordinary least squares, the random effects and fixed effects to examine the impact of home country macroeconomic and cultural factors on CBM&A outflows as an entry mode of Chinese firms. The authors check the robustness of the results using system GMM. Findings: The findings suggest that CBM&A as a preferred mode of market entry provides a means for obtaining strategic resources to develop competitive advantages for the Chinese emerging market firms. The regression results indicate that home country macroeconomic and cultural variables, including gross domestic product (GDP), liquidity, interest rates, inflation, acquisitions in resource seeking sectors and cultural distance play an important role in explaining the trends of CBM&A outflows by the Chinese firms. Research limitations/implications: The results imply that government support to emerging market multinational enterprises (EMEs) to acquire strategic assets and economic policies in the home country play an important role in shaping international expansion behaviour of EMEs through CBM&A. The study demonstrates that outward investments of EMEs are partly a function of the level of economic policies and government support at home. The limitation is that most of the Chinese CBM&A transactions took place in Asia/Pacific locations. Future studies appear warranted if new data become available. Originality/value: The study demonstrates how the institutions, strategic asset seeking with government support and economic policies in the home country play important role in shaping international expansion behaviour of emerging market enterprises through CBM&A thereby contributing to the political economy literature and institutional theory. More importantly, the study shows that the level of economic policies and development such as GDP, money supply, interest rates, inflation of the home country are important for EME growth in the international market.
KW - mergers and acquisitions
KW - Chinese firms
U2 - 10.1108/IMR-10-2014-0330
DO - 10.1108/IMR-10-2014-0330
JO - International Marketing Review
JF - International Marketing Review
Boateng A, Du M, Wang Y, Wang C, Ahammad MF. Explaining the surge in M&A as an entry mode: home country and cultural influences. International Marketing Review. 2017 Feb 13;34(1):87-108. https://doi.org/10.1108/IMR-10-2014-0330