Economy / Industry / Market / SPECIAL ISSUE ARTICLE

Success in completing cross‐border acquisitions by emerging market firms: What matters?

Posted On: Sep 23, 2021   |   Posted By: The World Economy

Abstract
While cross-border acquisitions by emerging market firms have grown rapidly in recent years, many have failed to bring the acquisitions to completion. Compared with acquisitions initiated by acquirers from developed economies, little is known about the possible determinants of completion or abandonment of CBAs conducted by EMFs. This paper investigates what contributes to the successful completion of CBAs by EMFs. Based on data of 637 announced CBAs by Chinese firms during 2000-17, we find that investing firms' self-learning experience from previous acquisitions can significantly increase the completion rate of subsequent related CBAs, while their industrial spillover experience helps raise the completion rate of unrelated CBAs. Our findings also show that the value of acquisition experience is significant only when the target firm is domiciled in countries with comparable level of institutional quality. Our results provide new insights into the complexity of the global M&A market and...

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