Emerging economies cross-border acquisitions as a market entry mode

Abstract

The intended contribution of this study is to identify cross-national dissimilarities that influence acquisition completion and equity participation on cross-border acquisitions between emerging markets. The measurement of Mahalanobis distance will be applied to a larger population of emerging markets besides BRICS which is intended to describe and confirm EMNE specific characteristics in the internationalization process. The research is designed in an exploratory way to fill the arising research gap and verify if existing EMNE-specific internationalization frameworks on the impact of cross-national and institutional distance on acquisition completion and equity participation. As it turned out, only the impact of cultural distance could be empirically verified on EMNE cross-border acquisitions which is argued to show that other institutional factors don’t have the same effect on EMNEs. Equity participation was found to be dependent on administrative, cultural, governance, and knowledge distance. The fact that EMNEs invest more in more distant locations, besides more cultural distant locations, provides evidence of EMNE-specific internationalization theory.