IDEAS home Printed from https://ideas.repec.org/a/eee/iburev/v24y2015i5p758-771.html
   My bibliography  Save this article

An event study of home and host country patent generation in Chinese MNEs undertaking strategic asset acquisitions in developed markets

Author

Listed:
  • Anderson, John
  • Sutherland, Dylan
  • Severe, Sean

Abstract

We use event study methodologies to analyze trends in home and host country patent applications of Chinese MNEs that acquire strategic asset-rich developed market businesses. Our results show the domestic market patents of Chinese MNEs rise significantly in the wake of such acquisitions, while those of the acquired target do not significantly change. These results hold for different ownership classes. In light of current theoretical debates, we discuss the possible motivations for such acquisitions by Chinese MNEs and the reasons for the observed patenting performance in both domestic and target businesses. We argue acquisition of codified strategic assets (such as patents) for the purpose of imitation and exploitation in the domestic Chinese market context provides one plausible explanation for our results.

Suggested Citation

  • Anderson, John & Sutherland, Dylan & Severe, Sean, 2015. "An event study of home and host country patent generation in Chinese MNEs undertaking strategic asset acquisitions in developed markets," International Business Review, Elsevier, vol. 24(5), pages 758-771.
    • Handle: RePEc:eee:iburev:v:24:y:2015:i:5:p:758-771
    DOI: 10.1016/j.ibusrev.2015.01.007
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969593115000244
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ibusrev.2015.01.007?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Dodd, Peter & Warner, Jerold B., 1983. "On corporate governance : A study of proxy contests," Journal of Financial Economics, Elsevier, vol. 11(1-4), pages 401-438, April.
    2. Siyan Chen & Norman V. Loayza & Marta Reynal-Querol, 2008. "The Aftermath of Civil War," The World Bank Economic Review, World Bank, vol. 22(1), pages 63-85, February.
    3. David J. TEECE, 2008. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," World Scientific Book Chapters, in: The Transfer And Licensing Of Know-How And Intellectual Property Understanding the Multinational Enterprise in the Modern World, chapter 5, pages 67-87, World Scientific Publishing Co. Pte. Ltd..
    4. Robert E. Hoskisson & Mike Wright & Igor Filatotchev & Mike W. Peng, 2013. "Emerging Multinationals from Mid-Range Economies: The Influence of Institutions and Factor Markets," Journal of Management Studies, Wiley Blackwell, vol. 50(7), pages 1295-1321, November.
    5. Luo, Yadong & Xue, Qiuzhi & Han, Binjie, 2010. "How emerging market governments promote outward FDI: Experience from China," Journal of World Business, Elsevier, vol. 45(1), pages 68-79, January.
    6. World Bank & the People’s Republic of China Development Research Center of the State Council, 2013. "China 2030 : Building a Modern, Harmonious, and Creative Society," World Bank Publications - Books, The World Bank Group, number 12925.
    7. John Mathews, 2006. "Dragon multinationals: New players in 21 st century globalization," Asia Pacific Journal of Management, Springer, vol. 23(1), pages 5-27, March.
    8. Buckley, Peter J. & Elia, Stefano & Kafouros, Mario, 2014. "Acquisitions by emerging market multinationals: Implications for firm performance," Journal of World Business, Elsevier, vol. 49(4), pages 611-632.
    9. Charles J. Corrado, 2011. "Event studies: A methodology review," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 51(1), pages 207-234, March.
    10. Peter J Buckley & L Jeremy Clegg & Adam R Cross & Xin Liu & Hinrich Voss & Ping Zheng, 2007. "The determinants of Chinese outward foreign direct investment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(4), pages 499-518, July.
    11. Mary M. Crossan & Marina Apaydin, 2010. "A Multi‐Dimensional Framework of Organizational Innovation: A Systematic Review of the Literature," Journal of Management Studies, Wiley Blackwell, vol. 47(6), pages 1154-1191, September.
    12. Charles Dhanaraj & Marjorie A Lyles & H Kevin Steensma & Laszlo Tihanyi, 2004. "Managing tacit and explicit knowledge transfer in IJVs: the role of relational embeddedness and the impact on performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(5), pages 428-442, September.
    13. Paul Guest & Dylan Sutherland, 2010. "The impact of business group affiliation on performance: evidence from China's 'national champions'," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 34(4), pages 617-631.
    14. Duso, Tomaso & Gugler, Klaus & Yurtoglu, Burcin, 2010. "Is the event study methodology useful for merger analysis? A comparison of stock market and accounting data," International Review of Law and Economics, Elsevier, vol. 30(2), pages 186-192, June.
    15. Pradhan, Jaya Prakash, 2009. "Emerging Multinationals from India and China: Origin, Impetus and Growth," MPRA Paper 18210, University Library of Munich, Germany.
    16. Gautam Ahuja & Riitta Katila, 2001. "Technological acquisitions and the innovation performance of acquiring firms: a longitudinal study," Strategic Management Journal, Wiley Blackwell, vol. 22(3), pages 197-220, March.
    17. Cloodt, Myriam & Hagedoorn, John & Van Kranenburg, Hans, 2006. "Mergers and acquisitions: Their effect on the innovative performance of companies in high-tech industries," Research Policy, Elsevier, vol. 35(5), pages 642-654, June.
    18. Child, John & Rodrigues, Suzana B., 2005. "The Internationalization of Chinese Firms: A Case for Theoretical Extension?1," Management and Organization Review, Cambridge University Press, vol. 1(3), pages 381-410, November.
    19. Daphne W. Yiu, 2011. "Multinational Advantages of Chinese Business Groups: A Theoretical Exploration," Management and Organization Review, The International Association for Chinese Management Research, vol. 7(2), pages 249-277, July.
    20. Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
    21. Chengqi Wang & Junjie Hong & Mario Kafouros & Mike Wright, 2012. "Exploring the role of government involvement in outward FDI from emerging economies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 43(7), pages 655-676, September.
    22. Shimpalee, Pattama L. & Breuer, Janice Boucher, 2006. "Currency crises and institutions," Journal of International Money and Finance, Elsevier, vol. 25(1), pages 125-145, February.
    23. Ahern, Kenneth R., 2009. "Sample selection and event study estimation," Journal of Empirical Finance, Elsevier, vol. 16(3), pages 466-482, June.
    24. Bülent Aybar & Aysun Ficici, 2009. "Cross-border acquisitions and firm value: An analysis of emerging-market multinationals," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(8), pages 1317-1338, October.
    25. Jean-François Hennart, 2009. "Down with MNE-centric theories! Market entry and expansion as the bundling of MNE and local assets," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(9), pages 1432-1454, December.
    26. De Beule, Filip & Duanmu, Jing-Lin, 2012. "Locational determinants of internationalization: A firm-level analysis of Chinese and Indian acquisitions," European Management Journal, Elsevier, vol. 30(3), pages 264-277.
    27. Hennart, J.M.A., 2012. "Emerging market multinationals and the theory of the multinational enterprise," Other publications TiSEM 23818daa-f6ed-4fd6-bca4-3, Tilburg University, School of Economics and Management.
    28. Deng, Ping, 2009. "Why do Chinese firms tend to acquire strategic assets in international expansion?," Journal of World Business, Elsevier, vol. 44(1), pages 74-84, January.
    29. Yadong Luo & Rosalie L Tung, 2007. "International expansion of emerging market enterprises: A springboard perspective," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(4), pages 481-498, July.
    30. Binder, John J, 1998. "The Event Study Methodology since 1969," Review of Quantitative Finance and Accounting, Springer, vol. 11(2), pages 111-137, September.
    31. Deng, Ping, 2013. "Chinese Outward Direct Investment Research: Theoretical Integration and Recommendations," Management and Organization Review, Cambridge University Press, vol. 9(3), pages 513-539, November.
    32. John Child & Suzana B. Rodrigues, 2005. "The Internationalization of Chinese Firms: A Case for Theoretical Extension?," Management and Organization Review, International Association of Chinese Management Research, vol. 1(3), pages 381-410, November.
    33. Lin Cui & Fuming Jiang, 2012. "State ownership effect on firms' FDI ownership decisions under institutional pressure: a study of Chinese outward-investing firms," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 43(3), pages 264-284, April.
    34. Wilbur Chung & Juan Alcácer, 2002. "Knowledge Seeking and Location Choice of Foreign Direct Investment in the United States," Management Science, INFORMS, vol. 48(12), pages 1534-1554, December.
    35. Rui, Huaichuan & Yip, George S., 2008. "Foreign acquisitions by Chinese firms: A strategic intent perspective," Journal of World Business, Elsevier, vol. 43(2), pages 213-226, March.
    36. Fabienne Fortanier & Rob van Tulder, 2009. "Internationalization trajectories--a cross-country comparison: Are large Chinese and Indian companies different?," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 18(2), pages 223-247, April.
    37. Ping Deng, 2013. "Chinese Outward Direct Investment Research: Theoretical Integration and Recommendations. 通过研究中国对外投资发展理论: 现实与建议," Management and Organization Review, The International Association for Chinese Management Research, vol. 9(3), pages 513-539, November.
    38. David J. Teece & Gary Pisano & Amy Shuen, 1997. "Dynamic capabilities and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 18(7), pages 509-533, August.
    39. repec:bla:jfinan:v:43:y:1988:i:5:p:1161-75 is not listed on IDEAS
    40. Klaus E. Meyer & Ram Mudambi & Rajneesh Narula, 2011. "Multinational Enterprises and Local Contexts: The Opportunities and Challenges of Multiple Embeddedness," Journal of Management Studies, Wiley Blackwell, vol. 48(2), pages 235-252, March.
    41. Thomas Halvorsen, 2012. "Size, Location and Agglomeration of Inward Foreign Direct Investment (FDI) in the United States," Regional Studies, Taylor & Francis Journals, vol. 46(5), pages 669-682, June.
    42. Klaus E Meyer & Saul Estrin, 2001. "Brownfield Entry in Emerging Markets," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 32(3), pages 575-584, September.
    43. Yiu, Daphne W., 2011. "Multinational Advantages of Chinese Business Groups: A Theoretical Exploration," Management and Organization Review, Cambridge University Press, vol. 7(2), pages 249-277, July.
    44. Ming Hua Li & Lin Cui & Jiangyong Lu, 2014. "Varieties in state capitalism: Outward FDI strategies of central and local state-owned enterprises from emerging economy countries," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 45(8), pages 980-1004, October.
    45. Rugman, Alan M. & Li, Jing, 2007. "Will China's Multinationals Succeed Globally or Regionally?," European Management Journal, Elsevier, vol. 25(5), pages 333-343, October.
    46. Ning, Lutao & Kuo, Jing-Ming & Strange, Roger & Wang, Boya, 2014. "International investors’ reactions to cross-border acquisitions by emerging market multinationals," International Business Review, Elsevier, vol. 23(4), pages 811-823.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ilan Alon & John Anderson & Ziaul Haque Munim & Alice Ho, 2018. "A review of the internationalization of Chinese enterprises," Asia Pacific Journal of Management, Springer, vol. 35(3), pages 573-605, September.
    2. Dylan Sutherland & John Anderson & Peter Hertenstein, 2018. "Is the Strategic Asset Seeking Investment Proclivity of Chinese MNEs Different to that of Developed Market MNEs? A Comparative Analysis of Location Choice and Orientation," Management International Review, Springer, vol. 58(6), pages 911-933, December.
    3. Ping Deng & Andrew Delios & Mike W. Peng, 2020. "A geographic relational perspective on the internationalization of emerging market firms," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(1), pages 50-71, February.
    4. Chabowski, Brian R. & Samiee, Saeed, 2023. "A bibliometric examination of the literature on emerging market MNEs as the basis for future research," Journal of Business Research, Elsevier, vol. 155(PB).
    5. Alessia Amighini & Claudio Cozza & Elisa Giuliani & Roberta Rabellotti & Vittoria Scalera, 2015. "Multinational enterprises from emerging economies: what theories suggest, what evidence shows. A literature review," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(3), pages 343-370, September.
    6. Weilei (Stone) Shi & Sunny Li Sun & Daying Yan & Zhu Zhu, 2017. "Institutional fragility and outward foreign direct investment from China," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(4), pages 452-476, May.
    7. Peter Hertenstein & Dylan Sutherland & John Anderson, 2017. "Internationalization within networks: Exploring the relationship between inward and outward FDI in China’s auto components industry," Asia Pacific Journal of Management, Springer, vol. 34(1), pages 69-96, March.
    8. Liang Chen & Yi Li & Di Fan, 2021. "Who are the most inclined to learn? Evidence from Chinese multinationals’ internationalization in the European Union," Asia Pacific Journal of Management, Springer, vol. 38(1), pages 231-257, March.
    9. Yin, Tong & De Propris, Lisa & Jabbour, Liza, 2021. "Assessing the effects of policies on China’s outward foreign direct investment," International Business Review, Elsevier, vol. 30(5).
    10. Wei, Ziyi & Nguyen, Quyen T.K., 2017. "Subsidiary strategy of emerging market multinationals: A home country institutional perspective," International Business Review, Elsevier, vol. 26(5), pages 1009-1021.
    11. Quer Ramón, Diego & Claver Cortés, Enrique & Rienda García, Laura, 2017. "Chinese multinationals in Spain: Determinants of establishment mode choice," Cuadernos de Gestión, Universidad del País Vasco - Instituto de Economía Aplicada a la Empresa (IEAE).
    12. Xiaoming He & Subrata Chakrabarty & Lorraine Eden, 2016. "The global emergence of Chinese multinationals: A resource-based view of ownership and performance," Asian Business & Management, Palgrave Macmillan, vol. 15(1), pages 1-31, February.
    13. Shi, Xinwei & Sutherland, Dylan & Williams, Christopher & Rong, Ke, 2021. "Chinese MNE acquisition of unrelated foreign businesses: The role of diversified business group affiliation, private ownership and strategic asset seeking," Journal of Business Research, Elsevier, vol. 129(C), pages 145-156.
    14. Hu, Helen Wei & Cui, Lin, 2014. "Outward foreign direct investment of publicly listed firms from China: A corporate governance perspective," International Business Review, Elsevier, vol. 23(4), pages 750-760.
    15. Rekha Rao-Nicholson & Catherine Cai, 2020. "The effects of ownership identity on corporate diversification strategy of Chinese companies in foreign markets," Asia Pacific Journal of Management, Springer, vol. 37(1), pages 91-126, March.
    16. Tao, Fang & Liu, Xiaohui & Gao, Lan & Xia, Enjun, 2017. "Do cross-border mergers and acquisitions increase short-term market performance? The case of Chinese firms," International Business Review, Elsevier, vol. 26(1), pages 189-202.
    17. Su, Cong & Kong, Lingshuang & Ciabuschi, Francesco & Yan, Haifeng, 2021. "Reverse innovation transfer in Chinese MNCs: The role of political ties and headquarters," Journal of International Management, Elsevier, vol. 27(1).
    18. Peter Zámborský & Zheng Joseph Yan & Erwann Sbaï & Matthew Larsen, 2021. "Cross-Border M&A Motives and Home Country Institutions: Role of Regulatory Quality and Dynamics in the Asia-Pacific Region," JRFM, MDPI, vol. 14(10), pages 1-24, October.
    19. Buckley, Peter J & Cui, Lin & Chen, Liang & Li, Yi & Choi, Yoona, 2023. "Following their predecessors’ journey? A review of EMNE studies and avenues for interdisciplinary inquiry," Journal of World Business, Elsevier, vol. 58(2).
    20. Yan, Zheng Joseph & Zhu, Jiuhua Cherrie & Fan, Di & Kalfadellis, Paul, 2018. "An institutional work view toward the internationalization of emerging market firms," Journal of World Business, Elsevier, vol. 53(5), pages 682-694.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:iburev:v:24:y:2015:i:5:p:758-771. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/133/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.