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Economic freedom and cross-border acquisitions from emerging markets into developed economies

Zhang, J.; He, X.; van Gorp, D.M.

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Authors

J. Zhang

D.M. van Gorp



Abstract

Extending the home base perspective by considering investors' parent countries, this study examines the effect of economic freedom (EF) on emerging-market enterprises' (EMEs) overseas acquisition completion in developed countries. Using a large data set of 5,174 cross-border acquisition deals from ten major emerging markets (EMs) during 1985–2011, we find that (1) the probability of deal completion is positively associated with the levels of EF of the acquirers' countries, the acquirers' parent and the target; (2) the EF of the countries of acquirers' parents has a substitutive effect on that of the acquirers' countries; (3) the difference of EF between the targets' countries and the countries of acquirers' parents negatively influences deal completion; and (4) the difference of EF between the targets' countries and the acquirers' countries negatively influences deal completion. These findings have important theoretical implications for international business scholars, as well as practical implications for managers and for policymakers of EMEs that are active in foreign direct investment.

Citation

Zhang, J., He, X., & van Gorp, D. (2017). Economic freedom and cross-border acquisitions from emerging markets into developed economies. Thunderbird International Business Review, 59(3), 313-331. https://doi.org/10.1002/tie.21872

Journal Article Type Article
Acceptance Date Jul 26, 2016
Online Publication Date Sep 15, 2016
Publication Date May 1, 2017
Deposit Date Aug 10, 2016
Publicly Available Date Mar 29, 2024
Journal Thunderbird International Business Review
Print ISSN 1096-4762
Electronic ISSN 1520-6874
Publisher Wiley
Peer Reviewed Peer Reviewed
Volume 59
Issue 3
Pages 313-331
DOI https://doi.org/10.1002/tie.21872
Public URL https://durham-repository.worktribe.com/output/1376641

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Copyright Statement
This is the accepted version of the following article: Zhang, J., He, X. and van Gorp, D. M. (2017), Economic Freedom and Cross-Border Acquisitions from Emerging Markets into Developed Economies. Thunderbird International Business Review, 59(3): 313-331, which has been published in final form at https://doi.org/10.1002/tie.21872. This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.




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