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Selective imitation of compatriot firms: Entry mode decisions of emerging market multinationals in cross-border acquisitions

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Abstract

This research investigates imitation in cross-border acquisitions (CBAs) by emerging market multinationals (EMNCs) in terms of the equity share sought in such acquisitions. Earlier acquisitions by peer compatriots and by developed-market multinationals (DMNCs) are both models for imitation, but the former are more similar and potentially relevant. Analysis of 608 CBAs by Chinese firms between 1987 and 2008 supports the above argument. Further, it reveals that state-owned Chinese firms are less likely to imitate in general. Both state-owned and privately-owned Chinese acquirers are most likely to imitate privately-owned Chinese acquirers previously invested in the same environment. For state-owned Chinese acquirers, more frequent pursuit of a particular target share by earlier state-owned Chinese acquirers decreases rather than increases the likelihood of a later state-owned Chinese investors buying a similar share.

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Acknowledgments

We are grateful to Special Issue Editors Klaus Meyer, Bersant Hobdari, Peter Gammeltoft, and Jing Li and three anonymous reviewers for their insightful feedbacks during the review process; and Filippo Wezel for his insightful suggestions. The research is supported in part by the Research Grants Council of Hong Kong (HKUST#16501814) and the National Natural Science Foundation of China (Grant No. 71502091).

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    1. Department of Innovation, Entrepreneurship and Strategy, School of Economics and Management, Tsinghua University, Beijing, China

      Zhenzhen Xie

    2. Department of Management, School of Business and Management, Hong Kong University of Science & Technology, Clear Water Bay, Kowloon, Hong Kong

      Jiatao Li

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    1. Zhenzhen Xie
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    Correspondence to Jiatao Li.

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    Methodological area: Quantitative

    Zhenzhen Xie and Jiatao Li contributed equally to this work.

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    Xie, Z., Li, J. Selective imitation of compatriot firms: Entry mode decisions of emerging market multinationals in cross-border acquisitions. Asia Pac J Manag 34, 47–68 (2017). https://doi.org/10.1007/s10490-016-9459-y

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