Cross-border M&As from emerging economy firms and institutional strength: the dangerous case of natural resource-seeking firms
Keywords
Loading...
Authors
Issue Date
2024-07-04
Language
en
Document type
Journal Title
Journal ISSN
Volume Title
Publisher
Title
ISSN
Volume
Issue
Startpage
Endpage
DOI
Abstract
This study examines the determinants influencing the location choices of emerging economy (EE) firms in cross-border mergers and acquisitions (CBMAs), focusing on the role of a recipient least developed country´s (LDC) institutional strength and its different components. It explores the moderating effects of the firms' internationalization motive, particularly natural resource-seeking (NRS)-firms. The research utilizes a comprehensive dataset of 991 CBMAs from 24 emerging economies, analyzing the impact of six World Governance Indicators (WGIs): control of corruption, political stability, government effectiveness, regulatory quality, rule of law, and voice and accountability. The findings indicate that EE firms tend to invest in countries with weaker control of corruption, regulatory quality, and voice and accountability. Furthermore, EE firms are more inclined to engage in CBMAs in LDCs with strong government effectiveness and rule of law. In contrast, NRS-firms prefer LDCs with weaker rule of law. The study concludes with recommendations for policymakers in LDCs to enhance their institutional frameworks to attract foreign investments from emerging economies. This research contributes to a nuanced understanding of how different types of EE firms prioritize various aspects of institutional strength based on their strategic needs and offers insights for policymakers to foster sustainable economic growth.
Description
Citation
Supervisor
Faculty
Faculteit der Managementwetenschappen