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Contractual buyout - a legitimate growth model in the enterprise development: foundations and implications

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  • K.S. Reddy
  • En Xie
  • Yuanyuan Huang

Abstract

The paper develops a new strategy framework in the enterprise development, especially associated with loss-making firms. A legitimate growth model, contractual buyout is a 'collective ownership and joint administrative policy' in the market for corporate control and also provides an option to buy target firm in a given contract between acquirer, target firm and financier. It posits alike to socio-culture trend 'dating before marriage'. The strategy is further described as takeover defensive method, tax benefit scheme, foreign market entry mode and post-merger integration approach. The model is precisely discussed in various taxonomies, such as motivations, foundations, illustrations, guidelines and implications. It eventually recommends capitalists and multinational enterprises to choose CoBO as a potential entry mode to avail creative business openings in the world economy.

Suggested Citation

  • K.S. Reddy & En Xie & Yuanyuan Huang, 2016. "Contractual buyout - a legitimate growth model in the enterprise development: foundations and implications," International Journal of Management and Enterprise Development, Inderscience Enterprises Ltd, vol. 15(1), pages 1-23.
    • Handle: RePEc:ids:ijmede:v:15:y:2016:i:1:p:1-23
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    Cited by:

    1. Reddy, Kotapati Srinivasa, 2016. "Turnaround or Contract Merger: A conceptual model to protect sick and government companies," MPRA Paper 74263, University Library of Munich, Germany, revised 2016.
    2. Rao, Narendar V. & Reddy, K.S. & Arrawatia, Rakesh, 2017. "Guest Editorial: Business Models/Projects – Design, Venture, Manage and Evaluate," MPRA Paper 79032, University Library of Munich, Germany.

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