Scandinavian Working Papers in Economics

Papers in Innovation Studies,
Lund University, CIRCLE - Centre for Innovation Research

No 2014/3: Chinese and Indian M&As in Europe: The relationship between motive and ownership choice

Lucia Piscitello (), Roberta Rabellotti () and Vittoria Giada Scalera ()
Additional contact information
Lucia Piscitello: School of Management - Politecnico di Milano
Roberta Rabellotti: Università di Pavia
Vittoria Giada Scalera: School of Management - Politecnico di Milano

Abstract: The present paper is about the ownership choices by Emerging Market Multinational Enterprises (EMNEs) when they invest in Europe through M&As, and the relationship with the main motivations underlying their international expansion. Namely, we claim that EMNEs prefer to acquire less control and keep the local partner when they invest for seeking knowledge. Additionally, EMNEs choose partial acquisitions in case of high dissimilarity in terms of culture, industry and knowledge base.

Our empirical analysis relies on a dataset of M&As undertaken by Chinese and Indian MNEs in high and medium-high tech sectors, in the period 2003-2011. We use content analysis of public announcements and company reports for classifying the main motivation of the acquisitions, and econometric analysis for testing our hypotheses. Our results confirm the expectations.

Keywords: Cross-border acquisitions; Ownership choice; Foreign direct investment motives; Emerging market firms

JEL-codes: F23; G34; O32

36 pages, May 7, 2014

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201403_Picitello_et_al.pdf PDF-file 

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