Expanding to outward foreign direct investment or not? A multi-dimensional analysis of entry mode transformation of Chinese private exporting firms

This research examines the factors determining whether or not exporting firms expand to outward foreign direct investment (OFDI) as part of their internationalisation strategy, using a recent survey of Chinese private-owned enterprises. We carry out a multi-dimensional analysis to investigate the impact of firm productivity, internal resources and the external environment on OFDI decisions, including both the decision to undertake OFDI and the volume of OFDI flows. It is found that productivity, technology-based capability, export experience, industry entry barriers, subnational institutions and intermediary institutional support affect firms’ OFDI decisions. The findings have important policy and managerial implications

The pre-acquisition process: the impact of institutional and cultural distance on the temporal hiatus bewteen the deal announcement and completion in emerging and developed countries

The literature on cross-border acquisitions has extensively addressed post-acquisition effects such as performance, but little has been studied on the pre-acquisition phase. Specifically, this study seeks to investigate deal duration and how the host institution environment and institutional and cultural distances of different countries affect time to completion. The sample contains 523 transitions between emerging countries China and India and Western countries Canada, France, Germany, U.K. and U.S., between 2010 and 2019. The results reveal that a country's high institutional quality hinders deal completion to protect local businesses, while institutional and cultural differences between two countries lengthen the deal duration

The performance implications of outward foreign direct investment for Chinese firms

The internationalisation of Chinese firms has attracted attention worldwide although most of Chinese MNEs are still in their early stage of internationalisation. Chinese firms internationalisation has unique characteristics due to their home country s unique political environment, culture and economic structure. This thesis aims to investigate the implications of both of short-term stock market performance and long-term operating performance of outward foreign direct investment (OFDI) by Chinese firms. Drawing on signalling theory and the institution-based view, the thesis firstly examines the extent of stock market reactions to the announcement of cross-border merger and acquisition (M&A) deals from a financial perspective, based on an event study of a sample of Chinese firms during the period 2000-2012. The findings indicate that Chinese firms cross-border M&As result in a positive stock market reaction. The shareholders of Chinese firms that acquire a target firm in a host country with a low level of political risk gain higher cumulative abnormal returns than those firms targeting companies in countries with a high level of political risk. However, the shareholders of Chinese state-owned enterprises experience lower abnormal returns compared with those of Chinese privately owned firms when engaging in cross-border M&A deals. The thesis further examines the impact of M&As on Chinese firms post-acquisition operating performance by integrating organisational learning theory with the institution-based view. The findings indicate that firms with serial cross-border M&As achieve better performance than those engaged in first-time cross-border M&As, and those with horizontal M&As perform better than those carrying out vertical M&As. The positive effects of acquisition experience and horizontal acquisitions on the post-acquisition performance of Chinese acquiring firms are reinforced by the institutional quality and language similarity of host countries. Finally, this thesis investigates from a management perspective how Chinese MNEs adopt different management strategies (e.g. expatriates and subsidiary autonomy) to respond to environmental challenges and improve the performance of overseas subsidiaries. Drawing on the resource dependence theory, this thesis examines the indirect effects of expatriates on subsidiary performance via subsidiary autonomy based on a survey sample of Chinese MNEs. The findings show that an increase in expatriates reduces the level of subsidiary autonomy and thus negatively affects subsidiary performance. This study also finds that the institutional quality of host countries reinforces the negative impact of expatriates on subsidiary autonomy, but reduces the importance of the latter on subsidiary performance

Ethics and taxation : a cross-national comparison of UK and Turkish firms

This paper investigates responses to tax related ethical issues facing busines

Strategic Asset Seeking and Innovation Performance: The Role of Innovation Capabilities and Host Country Institutions

fals

Institutional distances and equity-based entry modes: A systematic literature review

The institutional distance between home and host countries influences the benefits and costs of entry into markets where a firm intends to conduct business. Entry mode choice is a function of a firm's strategy to increase its competitiveness, efficiency, and control over resources that are critical to its operations. This systematic literature review aims to explain the influence of institutional distances on equity-based entry modes in international markets. The present study contributes to the literature on international business using institutional theory to address the entry mode, and by analyzing the nature of the constructs used to measure the influence institutional distances have on the choice of entry mode into foreign markets.info:eu-repo/semantics/publishedVersio

The effect of institutional distance on cross-border merger and acquisition time to completion: an empirical analysis of European Union deals

Cross-border merger and acquisitions (CBM&As) have extensively been used as a favorite entry mode in foreign markets, rapidly providing resources, competencies and local intelligence without risk of facing the liability of foreignness, or the burden of starting a greenfield investment. Studies indicate that greater institutional distance increases the costs of doing business in a foreign country, because it is associated with greater uncertainty and non-familiarity with the local environment. Besides that, prolonged duration of the M&A process has negative consequences for target and acquirer firms and bear significant costs for both parties. However, until so far, the studies regarding the effect of institutional distances on time to completion of a CBM&A deal are scarce. My theoretical model speculates on the effect of institutional distances (Political, Economic, Administrative and Cultural) in CBM&As time to completion. I further propose that European Union membership, of both target and acquirer countries, moderates the effect of institutional distances on CBM&As time to completion. The hypotheses are tested using a sample of 2,110 CBM&A deals that occurred during 2011 in European Union. On one hand, the results suggest that Political and Cultural distance have a positive effect on the time hiatus between announcement and completion of a CBM&A deal. On the other hand, the results suggest that European Union membership does moderate the effect of Economic and Administrative distance in CBM&A time to completion

The effect of institutional distance on cross-border merger and acquisition time to completion: an empirical analysis of European Union deals

Cross-border merger and acquisitions (CBM&As) have extensively been used as a favorite entry mode in foreign markets, rapidly providing resources, competencies and local intelligence without risk of facing the liability of foreignness, or the burden of starting a greenfield investment. Studies indicate that greater institutional distance increases the costs of doing business in a foreign country, because it is associated with greater uncertainty and non-familiarity with the local environment. Besides that, prolonged duration of the M&A process has negative consequences for target and acquirer firms and bear significant costs for both parties. However, until so far, the studies regarding the effect of institutional distances on time to completion of a CBM&A deal are scarce. My theoretical model speculates on the effect of institutional distances (Political, Economic, Administrative and Cultural) in CBM&As time to completion. I further propose that European Union membership, of both target and acquirer countries, moderates the effect of institutional distances on CBM&As time to completion. The hypotheses are tested using a sample of 2,110 CBM&A deals that occurred during 2011 in European Union. On one hand, the results suggest that Political and Cultural distance have a positive effect on the time hiatus between announcement and completion of a CBM&A deal. On the other hand, the results suggest that European Union membership does moderate the effect of Economic and Administrative distance in CBM&A time to completion

The Institutional Influence on the Location Strategies of Multinational Enterprises from Emerging Economies: Evidence from China’s Cross-border Mergers and Acquisitions

This study investigates the institutional influence on the location strategies of Chinese cross-border mergers and acquisitions (M&A) during the period 1985–2011 across 150 economies using Heckman’s two-stage model. The results suggest that Chinese MNEs are ‘shortsighted’ and show perverse behaviour towards host country risk when deciding on the location of host country and volume of investment undertaken through M&As, which may damage the firm’s long term profitability