Survival of full versus partial acquisitions: The moderating role of firm’s internationalization experience,cultural distance,and host country context characteristics |
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| Institution: | 1. Department of Marketing and Management, University of Southern Denmark, Campusvej 55, 5230 Odense M, Denmark;2. School of Marketing and Communication, University of Vaasa, Wolffintie 34, 65200 Vaasa, PL BOX 700, 65101 Vaasa, Finland;1. Vienna University of Economics and Business, Welthandelsplatz 1, Building D1, 1020 Vienna, Austria;2. University of Sussex Business School, University of Sussex, Falmer, Brighton, BN1 9RH, United Kingdom;3. University of Liverpool, Management School, Chatham Street, Liverpool L697ZH, United Kingdom;1. School of Economics and Business Administration, University of Tartu, J. Liivi 4-302, 51009, Tartu, Estonia;2. Department of Communication Sciences, Humanities and International Studies, Cultures, Languages, Literatures, Arts, Media (DISCUI), University of Urbino “Carlo Bo”, Via Saffi 15, 61029, Urbino, Italy;3. School of Management, University of South Australia Business School, Way Lee Building, Room WL5-34, SA, 5000, Adelaide, Australia;4. Department of Management, Faculty of Business and Economics, Macquarie Business School, Macquarie University, NSW 2109, Australia;1. Jackstädt Center of Entrepreneurship and Innovation Research, University of Wuppertal, Gaußstraße 20, 42119 Wuppertal, Germany;2. RWI – Leibniz-Institut für Wirtschaftsforschung, Hohenzollernstrasse 1-3, 45128 Essen, Germany;3. Hochschule Stralsund – University of Applied Sciences, Zur Schwedenschanze 15, 18435 Stralsund, Germany;1. Korea University Business School, Korea University, Seoul, Republic of Korea;2. Ivey Business School, Western University, London, Ontario, Canada |
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| Abstract: | The high divestment rates of acquired foreign units indicate challenges connected to planning and management of foreign acquisitions. In this paper we analyze the moderating effect of internal and external variables on the relationship between acquirers’ ownership strategy and survival of acquired foreign units. We test our hypotheses on a sample of 1275 acquisitions conducted by Finnish firms in various countries during the period 1980–2005. The results indicate that the probability of survival does not differ significantly between full and partial acquisitions. We further find that the likelihood of survival in full, relative to partial acquisitions, is positively associated with the acquisition-specific experience, but inversely related to general international and target country experience. The results also reveal that the positive impact of full acquisitions is stronger if the acquisitions are made in culturally similar countries, in less developed economies, and in markets where the country risk has increased after entry. |
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| Keywords: | Foreign direct investments Foreign acquisitions Survival of foreign acquired units Full and partial acquisitions Finland |
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