Entry Motives, Psychic Effects and Post-Acquisition Strategies of Emerging Economy Multinationals in Developed Countries

Acquisitions are among the most popular entry strategies abroad applied by multinational firms. These firms enter the acquisitions of foreign companies for numerous reasons, mainly to attain new competences, because they allow opportunities for creating synergies, overcome trade entry barriers and establish prospects to increase their market share overseas (Vermeulen and Barke ma, 2001). In the 1980s and the 1990s, most of the acquisitions were by multinational firms from advanced economies, especially from the United States, Western Europe and Japan. Nevertheless, recently multinational firms originating from numerous emerging economies, especially from Brazil, Russia, India and China (BRIC), have been strongly impacting the global economy through a number of acquisitions of major multinationals that originate from advanced economies. These international expansions call for further research (Luo and Wang, 2012). According to Verma etal. (2011), over 60 per cent of the total number of acquisitions performed by emerging country multinational companies (EMNCs) till the end of 2010 took place in developed economies. This percentage has been continuously increasing since the start of the global economic slump. Fetscherin and Beuttenmuller (2012) claim that Chinese investments in developed economies are expected to increase considerably in the next few years.