Chinese acquisitions of developed market firms: Home semi-formal institutions and a supportive partnering approach

Rui Torres de Oliveira and Daniel Rottig

Journal of Business Research, 2018, vol. 93, issue C, 230-241

Abstract: This paper examines the direct effects of the Chinese institutional environment on local MNCs' decisions to acquire firms in developed countries. Due to the significant capabilities gap between Chinese acquirers and developed market targets, these transactions require a unique post-M&A integration approach that differs from those prescribed by extant research. We use a qualitative research approach based on executive interviews and information gathered through secondary data sources and the analysis of media accounts to examine the acquisition of the German Preh GmbH by the Chinese Joyson Group. Building on institutional theory, we introduce a new category of institutions, semi-formal institutions, and related legitimacy pressures in order to point to the institutional complexity Chinese MNCs have to navigate. Furthermore, building on social capital theory, this paper develops a supportive partnering approach for implementing M&As by Chinese MNCs in developed markets, and discusses the academic and practical implications of this new approach.

Keywords: Mergers and acquisitions; Emerging market multinationals; Institutional complexity; Institutional direct effects; Institutional theory; Social capital (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (20)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:93:y:2018:i:c:p:230-241

DOI: 10.1016/j.jbusres.2018.04.031

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