Cross-border acquisition in services: Comparing ownership choice of developed and emerging economy MNEs in India

Somnath Lahiri, B. Elango and Sumit K. Kundu

Journal of World Business, 2014, vol. 49, issue 3, 409-420

Abstract: Despite rapid increase in cross-border acquisitions (CBAs), prior research has not examined ownership choice of foreign MNEs investing in the services sector in emerging economies. Drawing on multiple strands of literature, we posit acquirer's ownership choice (partial versus full acquisition) to be influenced by type of service offering (soft versus hard), institutional distance between acquirer and target nation, and acquirer's country-of-origin (emerging versus developed economy). Empirical analysis of 385 CBAs undertaken in India over an 11-year period provides evidence that services, in particular soft services, and high institutional distance increases the likelihood of full acquisition by emerging economy acquirers. However, acquirers from developed economies show preference for partial acquisition under similar circumstances.

Keywords: Cross-border acquisition; Services; India; Ownership choice; Emerging economy (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (31)

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DOI: 10.1016/j.jwb.2013.08.003

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