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Group Affiliation and Location of Indian Firms’ Foreign Acquisitions

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  • Pradhan, Jaya Prakash
  • Singh, Neelam

Abstract

Notwithstanding the extensive literature on emerging markets OFDI, generally led by Business Groups (BG), there is scant evidence on the differential patterns of OFDI by BG-affiliated and standalone firms. Employing data on the Indian overseas acquisitions during 2000–2008, this study examines their host-country related locational determinants, also separately for the BG-affiliated and other firms. The BG-affiliates have a relatively wider spread of international acquisitions and greater preference for Europe over North America. The censored Poisson estimates indicate the general attraction of host country market size and double-taxation-avoidance treaty. However, unlike the standalone firms, the overseas acquisitions location for BG-affiliates is significantly favourably influenced also by the host country growth rate, liberal inward-FDI regime and bilateral investment treaty, and is getting attracted to geographically distant nations. Again, only the standalone firms’ foreign acquisitions are significantly impacted by the cultural proximity and the quantitative relative importance, to the host nation, of imports from India. Thus, given their derived resources and parental networks, the BG-affiliated EMNEs (can) decide the OFDI host location in a broader and less restrained framework.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 24018.

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Date of creation: 20 Jul 2010
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Handle: RePEc:pra:mprapa:24018

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Keywords: Cross-border M&As; OFDI Location; Business Groups; Standalone Firms; Emerging Multinationals.;

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References

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Citations

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Cited by:
  1. Jaya Prakash Pradhan, 2010. "Strategic Asset-Seeking Activities of Emerging Multinationals: Perspectives of Foreign Acquisitions by Indian Pharmaceutical MNEs," Organizations and Markets in Emerging Economies, Faculty of Economics, Vilnius University, Faculty of Economics, Vilnius University, vol. 1(2).
  2. Peter Nunnenkamp & Maximiliano Sosa Andrés & Krishna Chaitanya Vadlamannati & Andreas Waldkirch, 2012. "What Drives India’s Outward FDI?," Kiel Working Papers 1800, Kiel Institute for the World Economy.
  3. Aggarwal, Raj & Pradhan, Jaya Prakash, 2010. "On the Globalness of Emerging Multinationals: A Study of Indian MNEs," MPRA Paper 24867, University Library of Munich, Germany.
  4. Vudayagi Balasubramanyam & N Forsans, 2013. "Why do Indian firms go abroad?," Working Papers, Lancaster University Management School, Economics Department 33867210, Lancaster University Management School, Economics Department.

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