Abstract
In this paper, we attempt to explain the acquisition behavior of emerging market firms (EMFs) in their advanced market acquisitions. We argue that behavior of EMFs can be better understood by focusing on the institutional and resource environment of their home countries. By examining 4161 cross-border equity acquisitions originating in 48 emerging markets between 2006-2015, we test for the role of the quality of home-country institutions, factor market development, and capital market development. Our results indicate that home country’s political and regulatory institutions have a positive effect on equity sought, while trade institutions and factor market development negatively affect equity sought in EMF acquisitions in advanced markets.
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