1,720,997 research outputs found
How do multinational firms from emerging countries use acquisitions in advanced economies to upgrade their capabilities
No full textDebate is ongoing on whether firms from emerging economies are catching up technologically and will be ultimately able to produce new technology. Such debate has been primarily fed by the recent boom of acquisitions of firms located in advanced countries by emerging multinationals enterprises (EMNEs) (UNCTAD 2006). Extant research has indeed documented that EMNEs extensively use acquisitions to address their competitive disadvantage (Child and Rodrigues 2005) by furthering up the technological ladder and upgrading their resources and capabilities (Guillén and Garcıa-Canal 2009; Rui and Yip 2008). These scholars, however, have provided empirical evidence on and discussed upgrading via acquisitions primarily with reference to a generic strategy of capabilities upgrading (e.g. Luo and Tung 2007: Makino, Lau and Yeh 2002).
We seek to advance this literature by asking whether different technology-intensive EMNEs follow different capability upgrading strategies when acquiring advanced country targets. In particular, we distinguish between a dual capability upgrading strategy which encompasses the simultaneous upgrading of technological and complementary (e.g. managerial and organizational) capabilities, and a pure complementary capability upgrading strategy. To this end, we investigate whether manufacturing and services EMNEs operating in different technology-intensive sectors select advanced country firms in the same or higher technology-intensive sectors. We assume that within the same technology-intensive sector advanced country firms tend to have superior complementary assets as a result of their home country advantage (Erramilli, Agarwal and Kim 1997), while advanced country targets in higher technology-intensity sectors own both higher technological and complementary capabilities. Thus, EMNEs follow a dual capability upgrading strategy when they simultaneously upgrade their technological and complementary capability by acquiring higher technology-intensive advanced country firms, and a pure complementary capability upgrading strategy by acquiring advanced country firms at the same technology-intensive level. An EMNE acquiring an advanced country firm within the same technology-intensive sector may indeed acquire new technological knowledge without, however, technologically upgrading.
We rely on a large database of over 600 mergers and acquisitions undertaken by EMNEs from Brazil, Russia, India and China (BRIC) in Europe, North-America (USA and Canada) and Japan between 1985 and 2008, and classified according to the level of technology intensity of acquirer and target. Our findings suggest that medium technology-intensive EMNEs follow a dual capability upgrading strategy as they already have a critical mass of competences and resources. EMNEs that are at the top and bottom of the technological ladder pursue a pure complementary capability upgrading strategy. Low technology-intensive EMNEs are yet unable to climb up the technological ladder, while high technology-intensive EMNEs are willing to address their competitive disadvantage by gaining complementary capabilities and resources (Barney and Zajac 1994). We found that these patterns are consistent across manufacturing and services.
The study offers two contributions. First, it adds to the literature on EMNEs by providing a finely-grained analysis of different capability upgrading strategies via acquisitions based upon the level of technological-intensity of acquirer and target. To this literature, it also offers a comparative analysis of manufacturing and services acquisitions. Studies on EMNEs have indeed primarily focused on manufacturing (e.g. Knoerich 2010; Van-Hoesel 1999), while our knowledge on service EMNEs is still scant. Second, it extends the literature on international knowledge sourcing by pointing out the need to consider south-north patterns
Acquisitions from emerging to advanced countries and capability upgrading strategies
No full textExtant research has documented that Multinational Enterprises from Emerging countries (EMNEs) rely on cross-border acquisitions of advanced country firms to upgrade their capabilities. However, these studies have investigated the phenomenon in terms of a generic capability upgrading strategy. This paper seeks to advance this literature by distinguishing between a dual capability upgrading strategy, which implies the acquisitions of both technology and complementary capabilities, and a pure complementary capability strategy, and by relating them to the technological intensity of acquiring and target firms. Hypotheses are developed and tested on a large sample of more than 600 acquisitions undertaken by firms located in Brazil, Russia, India and China in Europe, North America and Japan between 1985 and 2008. Results show that firms belonging to medium-tech manufacturing and services industries pursue a dual capability upgrading strategy by investing in high-tech industries, while high-tech and low-tech EMNEs pursue a pure complementary capability strategy
The role of home country-specific disadvantages in strategic asset acquisitions by emerging market multinationals
No full textThe evolution of strategic asset-seeking acquisitions by emerging multinationals
No full textWe study the extent to which emerging market multinational enterprises (EMNEs) engage in strategic asset-seeking acquisitions in advanced countries in relation to the strength of their home- and hostcountry national innovation system (NIS). We suggest that early acquisitions by EMNEs were used to compensate for the EMNEs relatively weak home NIS, and targeted weaker host NIS to limit the cognitive gap EMNEs would need to address. Instead, more recent acquisitions by EMNEs are supported by a stronger home NIS, and target firms in stronger host NIS. We also propose that acquisitions by high-tech (versus non-high-tech) EMNEs need a stronger home NIS due to the technological complexity of the industry, and are limited when the complexity of a stronger host NIS adds to the industry context. We find support for most of our arguments on 179 acquisitions in the Triad by Brazilian, Russian, Indian and Chinese multinationals
Home country effects of investing abroad: Evidence from Italy
No full textHome country effects of domestic firms investing abroad have been a highly debated issue. In particular, following the recent theoretical and empirical literature on firm heterogeneity, an important point that should be investigated is whether the impact of outward FDI on the performance of parent firms might differ according to their level of productivity or their size. Using quantile regressions and a data set for Italian firms investing abroad, this chapter shows that the impact of international expansion on parents’ performance varies across firms in different quantiles of the performance distribution and across foreign affiliates’ geographical locations
Local Environmental Non-Profit Organizations and the Green Investment Strategies of Family Firms
Full text linkWe add to the debate on the determinants of firms’ green investment strategies (GIS) by looking at societal stakeholders and explicitly testing the role of local environmental non-profit organizations (ENPOs) in GIS engagement by family and non-family firms. We argue that ENPOs favor GIS engagement only by family firms, which, due to their resource constraints, risk aversion and local embeddedness, are more sensitive to ENPOs normative pressure. We also suggest that the role of ENPOs is especially important for family firms’ GIS in those sectors with less stringent regulations, where ENPOs may act as a substitute for the coercive pressure of regulation, and promote firms’ self-regulatory behaviors. We test and find support for our arguments on a sample of about 2000 Italian manufacturing firms over the period 2001–2003. Our results are robust to the control of observable omitted variables, reverse causality and to alternative model specifications
MNEs' location strategies and labor standards. The role of operating and reputational considerations across industries
No full textWe investigate the role of local labor standards on MNEs’ location decisions across different sectors and sub-national regions within a developing country. We suggest that foreign investors adopt selective location strategies in connection with specific labor standards as a result of reputational and operating considerations. Foreign firms in more hazardous sectors prefer locations with higher occupational health and safety standards because they are more exposed to reputational risks. Those in sectors with less reversible investments prefer locations with lower degrees of unionization because their lower bargaining power increases their sensitivity to operating costs. We test our arguments across 26 sub-national Turkish regions over the period 2005–2011
The geography of international knowledge sourcing: looking back and moving forward
No full textMultinational corporations (MNCs) have increasingly sourced knowledge across borders, and foreign subsidiaries operations have played a critical role in MNC international knowledge sourcing strategies. The growing responsibility of foreign subsidiaries has paralleled an interest on the geog- raphy of this phenomenon by international business and international man- agement scholars. In this chapter, we review this research. In addition, based on recent research in economics and management drawing on economic geography and innovation studies, we highlight possible avenues of research to enrich our understanding of the geographical aspects of international knowledge sourcing. In particular, we suggest three lines of research oppor- tunities. A first opportunity relates to the explicit consideration of distance and border effects. A further research opportunity arises from investigat- ing the geographical distance of heterogeneous host country knowledge sources from the foreign subsidiary. A final research opportunity we discuss is about the contribution of heterogeneous host country knowledge sources to the variety of knowledge developed by the foreign subsidiary
Going Beyond Counting First Authors in Author Co-citation Analysis
Full text linkThe present study examines one of the fundamental aspects of author co-citation analysis (ACA) - the way co-citation
counts are defined. Co-citation counting provides the data on which all subsequent statistical analyses and mappings
are based, and we compare ACA results based on two different types of co-citation counting - the traditional type that
only counts the first one among a cited work's authors on the one hand and a non-traditional type that takes into
account the first 5 authors of a cited work on the other hand. Results indicate that the picture produced through this non-traditional author co-citation counting contains more coherent author groups and is therefore considerably clearer. However, this picture represents fewer specialties in the research field being studied than that produced through the traditional first-author co-citation counting when the same number of top-ranked authors is selected and analyzed. Reasons for these effects are discussed
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