FDI from Emerging to Advanced Countries: Some Insights on the Acquisition Strategies and on the Performance of Target Firms

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review

Abstract

The paper deals with acquisitions from emerging to advanced countries and the
performances of the target firms. We have used descriptive statistics to investigate
the strategies and the impact of the entry of emerging multinational companies
(EMNCs) from Brazil, Russia, India and China (BRIC) on the performance of firms
acquired in Europe, North America and Japan between 2000 and 2007. The results
show that EMNCs do not always acquire firms with a high pre acquisition performance and that they do not significantly increase the post acquisition profitability of the target firms. Nevertheless, EMNCs contribute to increase target firms’ productivity and sales and to slow down their loss of jobs. We also show the importance of the acquisition experience of the acquiring firms. Experienced EMNCs not only acquire firms with a higher pre acquisition performance, but also contribute to increase more significantly the productivity and sales of the target firms. Ultimately, we highlight the differences in the sizes and the technology intensity of the target firms acquired by experienced and inexperienced EMNCs to provide further insights about the strategies and the effects of acquisitions from emerging to advanced countries.
Original languageEnglish
Title of host publicationThe Multinational Enterprise and the Emergence of the Global Factory
EditorsPeter J. Buckley
Place of PublicationBasingstoke
PublisherPalgrave Macmillan Ltd
Chapter6
Pages137–153
Number of pages17
ISBN (Electronic)9781137402387
ISBN (Print)9781137402363, 9781349486687
DOIs
Publication statusPublished - 21 Nov 2014

Keywords

  • labor productivity
  • target firm
  • foreign direct investment
  • acquisition experience

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