We investigate the effect of distance – political, economic, cultural and spatial, on developed-economy multinational enterprises’ (MNEs’) ownership decisions in cross-border (CB) acquisitions. We start with the premise that distance discourages full and majority ownership in CB acquisitions, and further investigate the moderating role of distance-reducing factors. We examine how the relationship between distance and acquisition ownership decision is moderated by firm-specific characteristics, such as firm size, general international experience, and specific host country experience. Our data sample consists of 1,041 CB acquisitions under taken by Finnish MNEs in 58 countries during the time period 1990–2010. We find substantial support for all our hypotheses and conclude that the negative effects of distance on CB acquisition equity stake are positively moderated by the three firm-specific resources but their individual importance is conditional on the host country type (developed or emerging).
|Title of host publication||Progress in International Business Research (Volume 12 - Distance in International Business: Concept, Cost and Value)|
|Editors||Alain Verbeke, Jona Puck, Rob Van Tulder|
|Place of Publication||UK|
|Publication status||Published - 23 Nov 2017|
- Cross-border acquisitions
- equity commitment
- organizational resources