Abstract
This paper adopts a multi-level approach to investigate what factors shape the content of emerging market firms’ foreign market entry decisions, particularly the ownership participation in cross-border mergers and acquisitions (CBMAs). In addition, we would like to know if companies from emerging markets that possess higher (or lower) ownership in CBMA receive higher valuation in the market. Using panel data of CBMAs by nine EMNCs from 2000 to 2012, we found that industry-level factor (industry unrelatedness) and firm-level factor (board concentration) have significant impact on ownership participation in CBMA. We also found that investors do give high valuation to those emerging market firms that chose high ownership participation in CBMA. However, we did not find evidence to support the relationship between ownership participation in CBMA and cultural distance. Neither did we find the support for the relationship between ownership participation in CBMA and board independence.
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