Cross-Border Acquisition Performance of EM MNEs: The Moderating Role of State-Ownership & Performance

Abstract

This paper draws on the resource-based view and organisational learning theory to analyse the moderating role of state ownership and acquisition experience for firm performance of emerging market multinational enterprises (EMNEs). We contribute to the evolving literature on state-owned EMNEs by identifying various post cross- border acquisition (CBA) strategies, which differ in their impact on performance compared with privately owned EMNEs. We test our hypotheses using panel regression analysis on a large firm-level dataset spanning 43 emerging markets over the period 2006-2015. Overall, our findings indicate an inverted U shape relationship between diversification through CBAs and firm performance. More specially, this concave relationship is greater in the case of diversification that occurs in developed countries (DCs) compared with diversification in emerging markets (EMs). Furthermore, these relationships are moderated, albeit at different levels, by state- ownership and the EMNE acquisition experience both in the domestic and foreign markets.