Ownership in cross-border acquisitions and entry timing of the target firm

Lucio Fuentelsaz, Elisabet Garrido and Minerva González

Journal of World Business, 2020, vol. 55, issue 2

Abstract: We examine how the entry timing of targets influences the initial and the post-entry percentage of ownership acquired by multinationals. We argue that targets that have entered earlier into the market launch signals of lower uncertainty in contexts where first-mover advantages exist. As a consequence, multinationals are willing to buy higher levels of ownership in these early entrant targets and to increase their participation in the subsidiary equity in the post-entry stage. Finding support for these relationships, we study how market age and innovative behaviour of the target reduce the importance of leading time as determinant of the ownership decision.

Keywords: Cross-border acquisitions; Initial ownership; Ownership variation; Leading time; First-mover advantages; Market age; Technological change (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (7)

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DOI: 10.1016/j.jwb.2019.101046

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