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Business Group Affiliation And Location Of Indian Firms' Foreign Acquisitions

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Listed:
  • JAYA PRAKASH PRADHAN

    (Sardar Patel Institute of Economic and Social Research, Ahmedabad-380054, Gujarat, India)

  • NEELAM SINGH

    (Economics Department, Lady Shri Ram College, Delhi University New Delhi-110024, India)

Abstract

This study examines the determinants of host-location of cross-border acquisitions by Indian Business Group (BG)-affiliates and other firms during 2000–2008. Our empirical estimates indicate the general attraction of host country market-size and double-taxation-avoidance treaty. However, unlike the standalone firms, the acquisition-location of BG-affiliates is favourably influenced by the host growth rate and bilateral investment treaty, apparently drawn to distant nations, and not significantly affected by the cultural proximity. The host's share of home exports affects relatively more the acquisition-location of standalone firms. Thus the derived resources/ parental networks of BG-affiliated emerging market multinational enterprises influence their outward-FDI locational pattern.

Suggested Citation

  • Jaya Prakash Pradhan & Neelam Singh, 2011. "Business Group Affiliation And Location Of Indian Firms' Foreign Acquisitions," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 2(01), pages 19-41.
    • Handle: RePEc:wsi:jicepx:v:02:y:2011:i:01:n:s1793993311000208
    DOI: 10.1142/S1793993311000208
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    References listed on IDEAS

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    1. Carvalho, Flavia & Duysters, Geert & Costa, Ionara, 2010. "Drivers of Brazilian foreign investments – technology seeking and technology exploiting as determinants of emerging FDI," MERIT Working Papers 2010-017, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    2. Mathews, John A., 2002. "Dragon Multinational: A New Model for Global Growth," OUP Catalogue, Oxford University Press, number 9780195121469.
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    Cited by:

    1. Jaya Prakash Pradhan & Mohammad Zohair, 2015. "Subnational Export Performance and Determinants," Review of Market Integration, India Development Foundation, vol. 7(2), pages 133-174, August.
    2. Bhargavi Jayanthi & S.N.V. Sivakumar & Arunima Haldar, 2016. "Cross-border Acquisitions and Host Country Determinants: Evidence from Indian Pharmaceutical Companies," Global Business Review, International Management Institute, vol. 17(3), pages 684-699, June.
    3. Nunnenkamp, Peter & Sosa Andrés, Maximiliano & Vadlamannati, Krishna Chaitanya & Waldkirch, Andreas, 2012. "What drives India's outward FDI?," Kiel Working Papers 1800, Kiel Institute for the World Economy (IfW Kiel).
    4. Abdul Wajid & Anjim Sabiha & Shakeb Akhtar & Mosab I. Tabash & Linda Nalini Daniel, 2022. "Cross-Border Acquisitions and Shareholders’ Wealth: The Case of the Indian Pharmaceutical Sector," JRFM, MDPI, vol. 15(10), pages 1-17, September.
    5. Peter Nunnenkamp & Maximiliano Sosa Andrés & Krishna Chaitanya Vadlamannati & Andreas Waldkirch, 2012. "What Drives India’s Outward FDI?," South Asian Journal of Macroeconomics and Public Finance, , vol. 1(2), pages 245-279, December.

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    More about this item

    Keywords

    Cross-border M&As; OFDI location; business groups; standalone firms; EMNEs; G34; F21; F23; L22;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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