Abstract
Abstract Grounded in the organizational legitimacy perspective, this study examines the influence of formal institutional distance (FID) on the entry mode choice of Japanese cross-border acquirers. By disaggregating the FID variable using the Worldwide Governance Indicators, we provide a nuanced understanding of the relationship between FID dimensions and acquisition behavior. We find that out of the six disaggregated FID measures, three dimensions significantly impact acquisition decisions. Specifically, FID related to ‘regulatory quality’ and ‘control of corruption’ negatively affects the likelihood of full acquisitions, while FID related to the ‘rule of law’ positively influences full acquisitions. Our findings challenge the use of aggregated measures and highlight the importance of considering institutional variations. Japanese acquirers demonstrate a preference for higher control in uncertain legal environments. This study contributes to the literature by offering insights into the specific FID dimensions that drive the choice between partial and full acquisitions for Japanese firms.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
