IDEAS home Printed from https://ideas.repec.org/a/kap/asiapa/v31y2014i4p1075-1099.html
   My bibliography  Save this article

Determinants of early movers in cross-border merger and acquisition wave in an emerging market: A study of Indian firms

Author

Listed:
  • Manish Popli
  • Ashutosh Sinha

Abstract

A series of changes in India’s financial institutional regime led to waves of cross-border mergers and acquisitions (M&A) deals spanning various industries. In this article, we explore firm-level determinants that distinguish between early movers and followers in these waves. We tested our hypotheses using data for the 2001–2011 period. Analysis found support for our hypotheses that prior experience (with alliances), firm size, and international embeddedness of business group influence timing of firms’ cross-border M&A. Findings support the springboarding perspective that emerging market (EM) firms engage in preemptive acquisitions to gain first-mover advantage. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Manish Popli & Ashutosh Sinha, 2014. "Determinants of early movers in cross-border merger and acquisition wave in an emerging market: A study of Indian firms," Asia Pacific Journal of Management, Springer, vol. 31(4), pages 1075-1099, December.
    • Handle: RePEc:kap:asiapa:v:31:y:2014:i:4:p:1075-1099
    DOI: 10.1007/s10490-014-9378-8
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s10490-014-9378-8
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10490-014-9378-8?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. Tarun Khanna & Jan W. Rivkin, 2001. "Estimating the performance effects of business groups in emerging markets," Strategic Management Journal, Wiley Blackwell, vol. 22(1), pages 45-74, January.
    2. R. E. Caves & M. E. Porter, 1977. "From Entry Barriers to Mobility Barriers: Conjectural Decisions and Contrived Deterrence to New Competition," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 91(2), pages 241-261.
    3. Jan Johanson & Jan-Erik Vahlne, 2009. "The Uppsala internationalization process model revisited: From liability of foreignness to liability of outsidership," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(9), pages 1411-1431, December.
    4. Suma S. Athreye, 2005. "The Indian software industry and its evolving service capability," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 14(3), pages 393-418, June.
    5. Shaomin Li & Anil Nair, 2007. "A Comparative Study of the Economic Reforms in China and India: What Can We Learn?," Global Economic Review, Taylor & Francis Journals, vol. 36(2), pages 147-166.
    6. Mitchel Y. Abolafia (ed.), 2005. "Markets," Books, Edward Elgar Publishing, number 2788.
    7. Pacheco-de-Almeida, Goncalo & Zemsky, Peter, 2003. "The Effect of Time-to-Build on Strategic Investment under Uncertainty," RAND Journal of Economics, The RAND Corporation, vol. 34(1), pages 166-182, Spring.
    8. Tarun Khanna & Krishna Palepu, 2000. "Is Group Affiliation Profitable in Emerging Markets? An Analysis of Diversified Indian Business Groups," Journal of Finance, American Finance Association, vol. 55(2), pages 867-891, April.
    9. Stucchi, Tamara, 2012. "Emerging market firms’ acquisitions in advanced markets: Matching strategy with resource-, institution- and industry-based antecedents," European Management Journal, Elsevier, vol. 30(3), pages 278-289.
    10. Michael L. McDonald & James D. Westphal & Melissa E. Graebner, 2008. "What do they know? The effects of outside director acquisition experience on firm acquisition performance," Strategic Management Journal, Wiley Blackwell, vol. 29(11), pages 1155-1177, November.
    11. John Dunning, 2001. "The Eclectic (OLI) Paradigm of International Production: Past, Present and Future," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 8(2), pages 173-190.
    12. Jorge Niosi & F. Ted Tschang, 2009. "The strategies of Chinese and Indian software multinationals: implications for internationalization theory," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 18(2), pages 269-294, April.
    13. Shleifer, Andrei & Vishny, Robert W., 2003. "Stock market driven acquisitions," Journal of Financial Economics, Elsevier, vol. 70(3), pages 295-311, December.
    14. Daniel, Francis & Lohrke, Franz T. & Fornaciari, Charles J. & Turner, R. Jr., 2004. "Slack resources and firm performance: a meta-analysis," Journal of Business Research, Elsevier, vol. 57(6), pages 565-574, June.
    15. Michael Gort, 1969. "An Economic Disturbance Theory of Mergers," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 83(4), pages 624-642.
    16. Jaideep Anand & Harbir Singh, 1997. "Asset Redeployment, Acquisitions And Corporate Strategy In Declining Industries," Strategic Management Journal, Wiley Blackwell, vol. 18(S1), pages 99-118, July.
    17. Lin, Wen-Ting & Cheng, Kuei-Yang & Liu, Yunshi, 2009. "Organizational slack and firm's internationalization: A longitudinal study of high-technology firms," Journal of World Business, Elsevier, vol. 44(4), pages 397-406, October.
    18. Giovanni Balcet & Silvia Bruschieri, 2010. "Acquisition of Technologies and Multinational Enterprise Growth in the Automotive and the Pharmaceutical Industries: Drivers and Strategies," Palgrave Macmillan Books, in: Karl P. Sauvant & Jaya Prakash Pradhan & Ayesha Chatterjee & Brian Harley (ed.), The Rise of Indian Multinationals, chapter 5, pages 111-165, Palgrave Macmillan.
    19. Thomas Hutzschenreuter & Johannes C. Voll & Alain Verbeke, 2011. "The Impact of Added Cultural Distance and Cultural Diversity on International Expansion Patterns: A Penrosean Perspective," Journal of Management Studies, Wiley Blackwell, vol. 48(2), pages 305-329, March.
    20. Alvaro Cuervo-Cazurra, 2006. "Business groups and their types," Asia Pacific Journal of Management, Springer, vol. 23(4), pages 419-437, December.
    21. Jerayr (John) Haleblian & Gerry McNamara & Kalin Kolev & Bernadine J. Dykes, 2012. "Exploring firm characteristics that differentiate leaders from followers in industry merger waves: a competitive dynamics perspective," Strategic Management Journal, Wiley Blackwell, vol. 33(9), pages 1037-1052, September.
    22. Yuri Mishina & Timothy G. Pollock & Joseph F. Porac, 2004. "Are more resources always better for growth? Resource stickiness in market and product expansion," Strategic Management Journal, Wiley Blackwell, vol. 25(12), pages 1179-1197, December.
    23. Shige Makino & Chung-Ming Lau & Rhy-Song Yeh, 2002. "Asset-Exploitation Versus Asset-Seeking: Implications for Location Choice of Foreign Direct Investment from Newly Industrialized Economies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 33(3), pages 403-421, September.
    24. Kathleen M. Eisenhardt & Jeffrey A. Martin, 2000. "Dynamic capabilities: what are they?," Strategic Management Journal, Wiley Blackwell, vol. 21(10‐11), pages 1105-1121, October.
    25. Marian V Jones & Nicole E Coviello, 2005. "Internationalisation: conceptualising an entrepreneurial process of behaviour in time," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 36(3), pages 284-303, May.
    26. Morris A. Cohen & Jehoshua Eliasberg & Teck-Hua Ho, 1996. "New Product Development: The Performance and Time-to-Market Tradeoff," Management Science, INFORMS, vol. 42(2), pages 173-186, February.
    27. 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.
    28. Calof, Jonathan L. & Beamish, Paul W., 1995. "Adapting to foreign markets: Explaining internationalization," International Business Review, Elsevier, vol. 4(2), pages 115-131, June.
    29. Alvaro Cuervo-Cazurra & Mary M Maloney & Shalini Manrakhan, 2007. "Causes of the difficulties in internationalization," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(5), pages 709-725, September.
    30. Fama, Eugene F, 1980. "Agency Problems and the Theory of the Firm," Journal of Political Economy, University of Chicago Press, vol. 88(2), pages 288-307, April.
    31. Karl P. Sauvant & Jaya Prakash Pradhan & Ayesha Chatterjee & Brian Harley (ed.), 2010. "The Rise of Indian Multinationals," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-11475-3, October.
    32. Jaya Prakash Pradhan & Karl P. Sauvant, 2010. "Introduction: The Rise of Indian Multinational Enterprises: Revisiting Key Issues," Palgrave Macmillan Books, in: Karl P. Sauvant & Jaya Prakash Pradhan & Ayesha Chatterjee & Brian Harley (ed.), The Rise of Indian Multinationals, chapter 1, pages 1-23, Palgrave Macmillan.
    33. Deng, Ping, 2004. "Outward investment by Chinese MNCs: Motivations and implications," Business Horizons, Elsevier, vol. 47(3), pages 8-16.
    34. Dong-Sung Cho & Dong-Jae Kim & Dong Kee Rhee, 1998. "Latecomer Strategies: Evidence from the Semiconductor Industry in Japan and Korea," Organization Science, INFORMS, vol. 9(4), pages 489-505, August.
    35. Maurizio Zollo & Jeffrey J. Reuer, 2010. "Experience Spillovers Across Corporate Development Activities," Organization Science, INFORMS, vol. 21(6), pages 1195-1212, December.
    36. Sathyajit R Gubbi & Preet S Aulakh & Sougata Ray & M B Sarkar & Raveendra Chittoor, 2010. "Do international acquisitions by emerging-economy firms create shareholder value? The case of Indian firms," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(3), pages 397-418, April.
    37. Gianni Lorenzoni & Andrea Lipparini, 1999. "The leveraging of interfirm relationships as a distinctive organizational capability: a longitudinal study," Strategic Management Journal, Wiley Blackwell, vol. 20(4), pages 317-338, April.
    38. Louis T. Wells, 1983. "Third World Multinationals: The Rise of Foreign Investments from Developing Countries," MIT Press Books, The MIT Press, edition 1, volume 1, number 026273169x, April.
    39. James G. March, 1991. "Exploration and Exploitation in Organizational Learning," Organization Science, INFORMS, vol. 2(1), pages 71-87, February.
    40. Mitchell, Mark L. & Mulherin, J. Harold, 1996. "The impact of industry shocks on takeover and restructuring activity," Journal of Financial Economics, Elsevier, vol. 41(2), pages 193-229, June.
    41. Panagariya, Arvind, 2011. "India: The Emerging Giant," OUP Catalogue, Oxford University Press, number 9780199751563.
    42. Lihua Wang & Edward J. Zajac, 2007. "Alliance or acquisition? a dyadic perspective on interfirm resource combinations," Strategic Management Journal, Wiley Blackwell, vol. 28(13), pages 1291-1317, December.
    43. Timothy J. Sturgeon, 2002. "Modular production networks: a new American model of industrial organization," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 11(3), pages 451-496, June.
    44. Mary Lambkin, 1988. "Order of entry and performance in new markets," Strategic Management Journal, Wiley Blackwell, vol. 9(S1), pages 127-140, June.
    45. Vinish Kathuria, 2010. "Outward Investment by Indian Pharmaceutical and Software Multinational Enterprises: Are the Factors Different?," Palgrave Macmillan Books, in: Karl P. Sauvant & Jaya Prakash Pradhan & Ayesha Chatterjee & Brian Harley (ed.), The Rise of Indian Multinationals, chapter 6, pages 167-185, Palgrave Macmillan.
    46. 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.
    47. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    48. Deepak Nayyar, 2008. "The Internationalization of Firms From India: Investment, Mergers and Acquisitions," Oxford Development Studies, Taylor & Francis Journals, vol. 36(1), pages 111-131.
    49. Hitt, Michael A. & Harrison, Jeffrey S. & Ireland, R. Duane, 2001. "Mergers and Acquisitions: A Guide to Creating Value for Stakeholders," OUP Catalogue, Oxford University Press, number 9780195112856.
    50. 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.
    51. Lianxi Zhou & Wei-ping Wu & Xueming Luo, 2007. "Internationalization and the performance of born-global SMEs: the mediating role of social networks," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(4), pages 673-690, July.
    52. Raveendra Chittoor & MB Sarkar & Sougata Ray & Preet S. Aulakh, 2009. "Third-World Copycats to Emerging Multinationals: Institutional Changes and Organizational Transformation in the Indian Pharmaceutical Industry," Organization Science, INFORMS, vol. 20(1), pages 187-205, February.
    53. Stephen J. Brammer & Stephen Pavelin, 2006. "Corporate Reputation and Social Performance: The Importance of Fit," Journal of Management Studies, Wiley Blackwell, vol. 43(3), pages 435-455, May.
    54. 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.
    55. Gregor Andrade & Mark Mitchell & Erik Stafford, 2001. "New Evidence and Perspectives on Mergers," Journal of Economic Perspectives, American Economic Association, vol. 15(2), pages 103-120, Spring.
    56. Neil Thomson & Carla C.J.M. Millar, 2001. "The Role of Slack in Transforming Organizations," International Studies of Management & Organization, Taylor & Francis Journals, vol. 31(2), pages 65-83, June.
    57. 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.
    58. Louis A. Thomas, 1996. "Brand Capital and Entry Order," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 5(1), pages 107-129, March.
    59. 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.
    60. Sethi, Deepak, 2009. "Are multinational enterprises from the emerging economies global or regional?," European Management Journal, Elsevier, vol. 27(5), pages 356-365, October.
    61. Gonçalo Pacheco-De-Almeida & Peter Zemsky, 2003. "The Effect of Time-to-Build on Strategic Investment under Uncertainty," Post-Print hal-00576375, HAL.
    62. Harford, Jarrad, 2005. "What drives merger waves?," Journal of Financial Economics, Elsevier, vol. 77(3), pages 529-560, September.
    63. Contractor, Farok J. & Kumar, Vikas & Kundu, Sumit K., 2007. "Nature of the relationship between international expansion and performance: The case of emerging market firms," Journal of World Business, Elsevier, vol. 42(4), pages 401-417, December.
    64. Ann Terlaak & Andrew A. King, 2007. "Follow the small? Information‐revealing adoption bandwagons when observers expect larger firms to benefit more from adoption," Strategic Management Journal, Wiley Blackwell, vol. 28(12), pages 1167-1185, December.
    65. repec:bla:jfinan:v:59:y:2004:i:6:p:2685-2718 is not listed on IDEAS
    66. Daphne W Yiu & ChungMing Lau & Garry D Bruton, 2007. "International venturing by emerging economy firms: the effects of firm capabilities, home country networks, and corporate entrepreneurship," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(4), pages 519-540, July.
    67. B Elango & Chinmay Pattnaik, 2007. "Building capabilities for international operations through networks: a study of Indian firms," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(4), pages 541-555, July.
    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. 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).
    2. Buckley, Peter J. & Munjal, Surender & Enderwick, Peter & Forsans, Nicolas, 2016. "Cross-border acquisitions by Indian multinationals: Asset exploitation or asset augmentation?," International Business Review, Elsevier, vol. 25(4), pages 986-996.
    3. Ahsan, Faisal Mohammad & Fuad, Mohammad & Sinha, Ashutosh Kumar, 2021. "Seeking strategic assets within cross-border acquisition waves: a study of Indian firms," Journal of International Management, Elsevier, vol. 27(4).
    4. Gammeltoft, Peter & Cuervo-Cazurra, Alvaro, 2021. "Enriching internationalization process theory: insights from the study of emerging market multinationals," Journal of International Management, Elsevier, vol. 27(3).
    5. Edacherian, Saneesh & Panicker, Vidya Sukumara, 2022. "Do interlocks by different types of directors affect the nature of internationalization strategy of emerging market multinationals?," International Business Review, Elsevier, vol. 31(4).
    6. Yoo, Dasun & Reimann, Felix, 2017. "Internationalization of Developing Country Firms into Developed Countries: The Role of Host Country Knowledge-Based Assets and IPR Protection in FDI Location Choice," Journal of International Management, Elsevier, vol. 23(3), pages 242-254.
    7. B. Elango & Chinmay Pattnaik, 2011. "Learning Before Making the Big Leap," Management International Review, Springer, vol. 51(4), pages 461-481, August.
    8. Liu, Yi & Li, Yuan & Xue, Jiaqi, 2011. "Ownership, strategic orientation and internationalization in emerging markets," Journal of World Business, Elsevier, vol. 46(3), pages 381-393, July.
    9. 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.
    10. Khan, Zaheer & Lew, Yong Kyu, 2018. "Post-entry survival of developing economy international new ventures: A dynamic capability perspective," International Business Review, Elsevier, vol. 27(1), pages 149-160.
    11. Mohammad Fuad & Ashutosh Kumar Sinha, 2018. "Entry-timing, business groups and early-mover advantage within industry merger waves in emerging markets: A study of Indian firms," Asia Pacific Journal of Management, Springer, vol. 35(4), pages 919-942, December.
    12. Cui, Lin & Meyer, Klaus E. & Hu, Helen Wei, 2014. "What drives firms’ intent to seek strategic assets by foreign direct investment? A study of emerging economy firms," Journal of World Business, Elsevier, vol. 49(4), pages 488-501.
    13. Vikas Kumar & Deeksha Singh & Anish Purkayastha & Manish Popli & Ajai Gaur, 2020. "Springboard internationalization by emerging market firms: Speed of first cross-border acquisition," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(2), pages 172-193, March.
    14. Li, Jiatao & Li, Peixin & Wang, Baolian, 2016. "Do cross-border acquisitions create value? Evidence from overseas acquisitions by Chinese firms," International Business Review, Elsevier, vol. 25(2), pages 471-483.
    15. Li, Xue & Anwar, Sajid & Peng, Fei, 2022. "Cross-border acquisitions and the performance of Chinese publicly listed companies," Journal of Business Research, Elsevier, vol. 141(C), pages 575-588.
    16. Mike W. Peng & Sergey Lebedev & Cristina O. Vlas & Joyce C. Wang & Jason S. Shay, 2018. "The growth of the firm in (and out of) emerging economies," Asia Pacific Journal of Management, Springer, vol. 35(4), pages 829-857, December.
    17. Gaur, Ajai S. & Kumar, Vikas & Singh, Deeksha, 2014. "Institutions, resources, and internationalization of emerging economy firms," Journal of World Business, Elsevier, vol. 49(1), pages 12-20.
    18. Valeria, Gattai & Rajssa, Mechelli & Piergiovanna, Natale, 2016. "FDI and Heterogeneous Firms: Evidence from BRIC Countries," Working Papers 322, University of Milano-Bicocca, Department of Economics, revised 18 Jan 2016.
    19. Zhong, Weiguo & Peng, Jisheng & Liu, Chunlin, 2013. "Internationalization performance of Chinese multinational companies in the developed markets," Journal of Business Research, Elsevier, vol. 66(12), pages 2479-2484.
    20. Stucchi, Tamara, 2012. "Emerging market firms’ acquisitions in advanced markets: Matching strategy with resource-, institution- and industry-based antecedents," European Management Journal, Elsevier, vol. 30(3), pages 278-289.

    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:kap:asiapa:v:31:y:2014:i:4:p:1075-1099. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.