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FDI from emerging to advanced countries: some insights on the acquisition strategies and on the performance of target firms

Author

Listed:
  • Peter J. Buckley
  • Stefano Elia
  • Mario Kafouros

Abstract

The paper deals with acquisitions from emerging to advanced countries and the performances of the target firms. We have used descriptive statistics to investigate the strategies and the impact of the entry of emerging multinational companies (EMNCs) from Brazil, Russia, India and China (BRIC) on the performance of firms acquired in Europe, North America and Japan between 2000 and 2007. The results show that EMNCs do not always acquire firms with a high pre acquisition performance and that they do not significantly increase the post acquisition profitability of the target firms. Nevertheless, EMNCs contribute to increase target firms? productivity and sales and to slow down their loss of jobs. We also show the importance of the acquisition experience of the acquiring firms. Experienced EMNCs not only acquire firms with a higher pre acquisition performance, but also contribute to increase more significantly the productivity and sales of the target firms. Ultimately, we highlight the differences in the sizes and the technology intensity of the target firms acquired by experienced and inexperienced EMNCs to provide further insights about the strategies and the effects of acquisitions from emerging to advanced countries.

Suggested Citation

  • Peter J. Buckley & Stefano Elia & Mario Kafouros, 2011. "FDI from emerging to advanced countries: some insights on the acquisition strategies and on the performance of target firms," ECONOMIA E POLITICA INDUSTRIALE, FrancoAngeli Editore, vol. 2011(1), pages 181-197.
    • Handle: RePEc:fan:polipo:v:html10.3280/poli2011-011007
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    Citations

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    Cited by:

    1. Khanindra Ch. Das & Nilanjan Banik, 2015. "Outbound Foreign Direct Investment from China and India," China Report, , vol. 51(3), pages 204-229, August.
    2. Valeria Gattai, 2013. "The dragon and the elephant on the way to Italy," ECONOMIA E POLITICA INDUSTRIALE, FrancoAngeli Editore, vol. 2013(4), pages 63-87.
    3. Alessia Amighini & Claudio Cozza & Elisa Giuliani & Roberta Rabellotti & Vittoria Scalera, 2015. "Multinational enterprises from emerging economies: what theories suggest, what evidence shows. A literature review," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(3), pages 343-370, September.
    4. Peter J. Buckley, 2018. "Internalisation Theory and Outward Direct Investment by Emerging Market Multinationals," Management International Review, Springer, vol. 58(2), pages 195-224, April.
    5. Kearney, Colm, 2012. "Emerging markets research: Trends, issues and future directions," Emerging Markets Review, Elsevier, vol. 13(2), pages 159-183.
    6. Peter J Buckley & L Jeremy Clegg & Hinrich Voss & Adam R Cross & Xin Liu & Ping Zheng, 2018. "A retrospective and agenda for future research on Chinese outward foreign direct investment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(1), pages 4-23, January.
    7. Sergio Paba & Cinzia Parolini, 2020. "Should we fear or hope for Chinese acquisitions? Evidence from Italy," Department of Economics 0182, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".

    More about this item

    Keywords

    Fusioni e acquisizioni; imprese multinazionali emergenti; performance delle imprese target; precedente esperienza d?acquisizione;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • G3 - Financial Economics - - Corporate Finance and Governance
    • P47 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Performance and Prospects

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