International acquisitions by Polish MNEs. Value creation or destruction?

Abstract

PurposeThe purpose of this paper is to determine the performance implications of cross-border acquisitions by Polish multinationals. Additionally, the study considers specific factors affecting acquisition performance, such as acquirer’s prior cross-border acquisition experience and the type of market (advanced versus emerging) in which the target is located.Design/methodology/approachThis study is based on a sample of 104 cross-border acquisition events in which a Polish public company, quoted on the Warsaw Stock Exchange acted as an acquiring party. The event study method was applied to determine the impact of acquisition announcements on the share price of the acquiring companies for 3-, 4- and 5-day event windows. The proposed hypotheses were additionally verified through hierarchical regression.FindingsThe research shows that a typical cross-border acquisition carried out by a Polish multinational ends in creating value. While the impact of prior cross-border acquisition experience is only significant for the shortest event window, the choice of targets from emerging markets significantly improves acquisition outcomes for all of the event windows examined.Originality/valueThe study is the first project on such a scale to focus on cross-border acquisitions by multinationals from Central and Eastern Europe to have used event study methodology. It has shown that acquirers from mid-range emerging markets, such as Poland, tend to benefit more from leveraging their ability to function in underdeveloped and dynamic institutional settings if they acquire companies operating in other emerging markets rather than those based in more developed economies.