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Chinese acquisitions of developed market firms: Home semi-formal institutions and a supportive partnering approach

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  • Torres de Oliveira, Rui
  • Rottig, Daniel

Abstract

This paper examines the direct effects of the Chinese institutional environment on local MNCs' decisions to acquire firms in developed countries. Due to the significant capabilities gap between Chinese acquirers and developed market targets, these transactions require a unique post-M&A integration approach that differs from those prescribed by extant research. We use a qualitative research approach based on executive interviews and information gathered through secondary data sources and the analysis of media accounts to examine the acquisition of the German Preh GmbH by the Chinese Joyson Group. Building on institutional theory, we introduce a new category of institutions, semi-formal institutions, and related legitimacy pressures in order to point to the institutional complexity Chinese MNCs have to navigate. Furthermore, building on social capital theory, this paper develops a supportive partnering approach for implementing M&As by Chinese MNCs in developed markets, and discusses the academic and practical implications of this new approach.

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  • Torres de Oliveira, Rui & Rottig, Daniel, 2018. "Chinese acquisitions of developed market firms: Home semi-formal institutions and a supportive partnering approach," Journal of Business Research, Elsevier, vol. 93(C), pages 230-241.
    • Handle: RePEc:eee:jbrese:v:93:y:2018:i:c:p:230-241
    DOI: 10.1016/j.jbusres.2018.04.031
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    12. Yanan Yang & Christoph Lütge, 2023. "Chinese Multinationals’ Dynamic Integrations in the Developed Market: From a Resource Dependence Perspective," SAGE Open, , vol. 13(4), pages 21582440231, December.
    13. Osuji, Juliet & Torres de Oliveira, Rui & Tupper, Christina, 2024. "Escaping the stigma of firm operations in emerging markets: Are you willing to pay the price?," Journal of Business Research, Elsevier, vol. 180(C).
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