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Investment motives, ownership advantages and institutional distance: An examination of Russian cross-border acquisitions

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  • Dikova, Desislava
  • Panibratov, Andrei
  • Veselova, Anna

Abstract

We apply the OLI framework, first, to examine the motives of Russian cross-border (CB) M&A activity in the period 2007–2013 and, second, to analyze the ownership preferences of Russian multinationals abroad. We test our first set of models using panel data of 322 country/year observations and the second set of models using cross-sectional firm-level data of 318 M&A deals. Our analysis shows that traditional investment motives provide a limited explanation of what attracts or deters Russian acquirers abroad. We extend our base-model to include institutional distance and find that it plays a critical role on Russian CB M&A activity. As a second step, we employ state ownership as a specific type of institutional ownership advantage and discover that partial state ownership discourages Russian firms from pursuing full-ownership in CB M&As. Moreover, Russian multinationals benefit from internalization advantages (full M&A ownership) in tandem with location advantages derived from natural resource endowments.

Suggested Citation

  • Dikova, Desislava & Panibratov, Andrei & Veselova, Anna, 2019. "Investment motives, ownership advantages and institutional distance: An examination of Russian cross-border acquisitions," International Business Review, Elsevier, vol. 28(4), pages 625-637.
    • Handle: RePEc:eee:iburev:v:28:y:2019:i:4:p:625-637
    DOI: 10.1016/j.ibusrev.2018.12.007
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    Cited by:

    1. Xiao, Shufeng & Tian, Xiaocong, 2023. "Performance feedback and location choice of foreign direct investment," International Business Review, Elsevier, vol. 32(4).
    2. Tu, Wenjun & Zheng, Xiaolan & Li, Lei & Lin, Zhiang (John), 2021. "Do Chinese firms benefit from government ownership following cross-border acquisitions?," International Business Review, Elsevier, vol. 30(3).
    3. Zhou, Chenxi & Zhang, Yameng & Bu, Maoliang, 2024. "Home country adverse political shocks and cross-border mergers and acquisitions financial performance of politically connected emerging market firms," International Business Review, Elsevier, vol. 33(3).
    4. Ye, Silin & Zhou, Jing & Jiang, Yunwen & Liu, Xiaming, 2023. "Managers as the bridge: How cultural friction influences the integration of cross-border mergers and acquisitions," International Business Review, Elsevier, vol. 32(4).
    5. Yang, Wei & Meyer, Klaus E., 2020. "How do local and foreign firms compete? Competitive actions in an emerging economy," International Business Review, Elsevier, vol. 29(3).
    6. Popli, Manish & Ahsan, Faisal Mohammad, 2024. "Springboarding and activity load: Constraints on managerial attention and dependency on advisory firms in cross-border acquisitions," Journal of International Management, Elsevier, vol. 30(2).
    7. Lamotte, Olivier & Chalençon, Ludivine & Mayrhofer, Ulrike & Colovic, Ana, 2021. "Intangible resources and cross-border acquisition decisions: The impact of reputation and the moderating effect of experiential knowledge," Journal of Business Research, Elsevier, vol. 131(C), pages 297-310.
    8. Wang, Yi & Larimo, Jorma, 2020. "Survival of full versus partial acquisitions: The moderating role of firm’s internationalization experience, cultural distance, and host country context characteristics," International Business Review, Elsevier, vol. 29(1).
    9. Wang, Molin & Yan, Haifeng & Ciabuschi, Francesco & Su, Cong, 2023. "Facilitator or inhibitor? The effect of host-country intellectual property rights protection on China’s technology-driven acquisitions," International Business Review, Elsevier, vol. 32(6).
    10. Ahsan, Faisal Mohammad & Popli, Manish & Kumar, Vikas, 2024. "Formal institutions and cross-border mergers and acquisitions: A systematic literature review and research agenda," International Business Review, Elsevier, vol. 33(5).
    11. Duan, Yunlong & Deng, Zhiqing & Liu, Hanxiao & Yang, Meng & Liu, Meiwu & Wang, Xiang, 2022. "Exploring the mediating effect of managerial ability on knowledge diversity and innovation performance in reverse cross-border M&As: Evidence from Chinese manufacturing corporations," International Journal of Production Economics, Elsevier, vol. 247(C).
    12. Huang, Dongdong & Tsui-Auch, Lai Si & Dieleman, Marleen & Gomulya, David, 2024. "Politically connected EMNCs in a (de)globalising world: A review and future research directions," International Business Review, Elsevier, vol. 33(3).
    13. Andrei Panibratov & Daria Klishevich, 2023. "Emerging market state-owned multinationals: a review and implications for the state capitalism debate," Asian Business & Management, Palgrave Macmillan, vol. 22(1), pages 84-117, February.
    14. Gómez-Mera, Laura & Varela, Gonzalo, 2024. "Emerging market multinationals and international investment agreements," International Business Review, Elsevier, vol. 33(3).
    15. Sato, Akiko & Panibratov, Andrei, 2023. "Causal mechanisms of COVID-19 disruptive effects on liability of foreignness and the emergence of new firm-specific advantages," International Business Review, Elsevier, vol. 32(4).
    16. Lee, In Hyeock (Ian) & Hong, Eunsuk & Shin, Jong Kook, 2023. "Multinational enterprises, intra-regional cross-border M&As, and performance: Location advantages of market versus knowledge," International Business Review, Elsevier, vol. 32(6).
    17. Eunmi Tatum Lee & Young-Ryeol Park & Jooyoung Kwak, 2023. "Knowledge distance and innovation performance: the moderating role of internationalization breadth and depth," Asian Business & Management, Palgrave Macmillan, vol. 22(3), pages 1131-1154, July.
    18. Aray, Yulia & Dikova, Desislava & Garanina, Tatiana & Veselova, Anna, 2021. "The hunt for international legitimacy: Examining the relationship between internationalization, state ownership, location and CSR reporting of Russian firms," International Business Review, Elsevier, vol. 30(5).
    19. 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.
    20. Raghavendra, Chandrika & Sharif, Taimur & Mahesh, Rampilla & Yadav, Miklesh Prasad & Abedin, Mohammad Zoynul, 2023. "Do market, resource and knowledge distance impact inbound cross-border acquisition?," Global Finance Journal, Elsevier, vol. 57(C).
    21. 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).
    22. Alvaro Cuervo-Cazurra & Anna Grosman & William L. Megginson, 2023. "A review of the internationalization of state-owned firms and sovereign wealth funds: Governments’ nonbusiness objectives and discreet power," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(1), pages 78-106, February.
    23. Cuervo-Cazurra, Alvaro & Li, Cheng, 2021. "State ownership and internationalization: The advantage and disadvantage of stateness," Journal of World Business, Elsevier, vol. 56(1).
    24. Amar Anwar & Ichiro Iwasaki, 2022. "Institutions and FDI from BRICS countries: a meta-analytic review," Empirical Economics, Springer, vol. 63(1), pages 417-468, July.
    25. Garanina, Tatiana & Kim, Oksana, 2023. "The relationship between CSR disclosure and accounting conservatism: The role of state ownership," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 50(C).

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