Abstract
As new emerging-market multinationals have cheap production cost in the primary markets and the need to upgrade productivity, they set their globalization strategy accordingly. I find that emerging-market acquirers receive 0.93% mean return over the three-day announcement window in cross-border acquisitions. Three channels to acquire complementary resources are explored. Firstly, deals that facilitate knowledge transfer generate higher acquirer returns by targeting at firms with R&D record, retaining the target CEO, and utilizing the acquirers’ primary market. Secondly, the acquirer returns are unaffected by transfer in managerial efficiency. Lastly, the acquirer returns are lower for the deals aiming at natural resources.
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