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Chinese MNE Acquisition of Unrelated Foreign Businesses: The Role of Diversified Business Group Affiliation, Private Ownership and Strategic Asset Seeking

Shi, Xinwei; Sutherland, Dylan; Williams, Chris; Rong, Ke

Chinese MNE Acquisition of Unrelated Foreign Businesses: The Role of Diversified Business Group Affiliation, Private Ownership and Strategic Asset Seeking Thumbnail


Authors

Xinwei Shi

Chris Williams

Ke Rong



Abstract

While the acquisition by Chinese firms of unrelated foreign businesses has become quite common, it is a highly risky undertaking not fully explained by international business scholars. Using resource-based and institutional theory, we hypothesize that affiliation with a domestically diversified business group confers pre- and post-acquisition advantages and legitimacy, fostering unrelated foreign acquisitions. In addition, we argue that private ownership as well as a motive to seek strategic assets amplify this tendency among Chinese firms affiliated to diversified groups. Ordered logit modelling for 662 Chinese cross-border M&As over a 10-year period provides support for our hypotheses. Our findings shed new light on: the distinctive characteristics of Chinese MNEs; broader conceptual arguments regarding the strategy of emerging market MNEs; the apparent paradox of why Chinese MNEs have used international acquisitions to diversify at a time when many Western diversified conglomerates are divesting non-core businesses.

Citation

Shi, X., Sutherland, D., Williams, C., & Rong, K. (2021). Chinese MNE Acquisition of Unrelated Foreign Businesses: The Role of Diversified Business Group Affiliation, Private Ownership and Strategic Asset Seeking. Journal of Business Research, 129, 145-156. https://doi.org/10.1016/j.jbusres.2021.02.036

Journal Article Type Article
Acceptance Date Feb 18, 2021
Online Publication Date Mar 6, 2021
Publication Date 2021-05
Deposit Date Feb 18, 2021
Publicly Available Date Sep 6, 2022
Journal Journal of Business Research
Print ISSN 0148-2963
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 129
Pages 145-156
DOI https://doi.org/10.1016/j.jbusres.2021.02.036
Public URL https://durham-repository.worktribe.com/output/1252131

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