Xiaohu Qiao

Dated on 12112017.

My study draws on the evidence gathered from an acquisition capability research project in the area of emerging economy firms acquiring cross-border business to examine the vicarious learning and acquisition capability development mechanisms. This paper attempts to develop a theory expansion for the existence of current acquisition capability research. The case study focuses on the specific project of cross-border acquisition from China.

This study analyses the relationship between acquisition prior experience, vicarious learning mechanism and acquisition capability. First, as emerging economy firms lack of prior acquisition experience, it is the focus to understand how inexperienced acquirers develop its acquisition capability through different learning approach. Following Haspestagh and Hemission (Haspeslagh and Jemison, 1991) and Capron’s (Capron and Shen, 2007) work, I consolidated the current acquisition capability theories and developed further to fit into the context of emerging economy. Both theories have its problem. Haspestagh and Hemission’s (Haspeslagh and Jemison, 1991) definition is limited by acquisition processes and focuses on the determined acquisition which a firm already decided to take acquisition. There remains the issue of reality on the business environment such as emerging economies. Capron’s acquisition-based dynamic capability (ABDC) theory proposes a new capability as acquisition model selection capability which emphasises that acquisition might be one of the methods for firms to internationalising. However, Capron does not explicitly explore how this acquisition model selection capability is influenced by the different business environment, for instance, the emerging economies. Solutions to this problem will be widely discussed in this research. One remedy is to redefine the concept of acquisition capability as acquisition strategy capability, acquisition completion capability, and acquisition implementation capability.

Second, learning mechanism contains experience accumulation, knowledge articulation, and knowledge codification (Zollo and Winter, 2002). In general, the major method of experience accumulation is learning-by-doing which organisations have some prior experience. However, emerging economy firms had less own prior experience in cross-border acquisitions compared to developed countries. Emerging economy firms adopt a mix of learning behaviours constituted by experience learning and vicarious learning. The empirical evidence indicates that the emerging economy firms can learn to manage cross-border acquisition by imitating competitors’ similar acquisition or experience-sharing from stakeholders and observe the others, such as competitors’ cross-border acquisitions.

Key Words: Acquisition, Acquisition Capability, Cross-border Acquisition; Emerging Economies, Vicarious Learning, Imitation Learning