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Cross-border acquisitions by Indian multinationals: Asset exploitation or asset augmentation?
Institution:1. Centre for International Business, Leeds University Business School, University of Leeds, Leeds LS2 9JT, United Kingdom;2. Auckland University of Technology, Auckland, New Zealand;3. University of Exeter Business School, Exeter EX4 4PU, United Kingdom;4. James E. Lynch India and South Asia Business Centre, Leeds University Business School, University of Leeds, Leeds LS2 9JT, United Kingdom;1. TMCD, Department of International Development, University of Oxford, United Kingdom;2. Nanjing Audit University, China;3. Department of Political Sciences, University of Bari, Italy, and Institute of Development Policy and Management, University of Antwerp, Belgium;1. Department of Innovation Management & Strategy, University of Groningen, The Netherlands;2. Radboud University, Institute for Management Research, Department of Strategy, The Netherlands;1. Department of Management, University of North Texas, 1155 Union Circle #311160, Denton, TX, 76203, USA;2. Department of Management, Marketing and Information Systems, Texas A&M University at Kingsville. 120 BUSA, Kingsville, TX, 78363, USA;3. Culverhouse College of Commerce, University of Alabama, 133 Alston Hall, 361 Stadium Dr., Tuscaloosa, AL, 35404, USA;1. Campus Antwerp, Faculty of Economics and Business, KU Leuven University, Korte Nieuwstraat 33, 2000 Antwerpen, Belgium;2. Campus Brussels, Faculty of Economics and Business, KU Leuven University, Warmoesberg 26, 1000 Brussel, Belgium;1. Management School, University of Sheffield, 9 Mappin Street, Sheffield, S1 4DT, United Kingdom;2. Strathclyde Business School, University of Strathclyde, 199 Cathedral Street, Glasgow, G4 0QU, United Kingdom;3. Warwick Business School, University of Warwick, Coventry, United Kingdom;1. College of Business Administration, University of Northern Iowa, Cedar Falls, United States;2. Durham University Business School, Durham University, Durham, United Kingdom;3. College of Business & Public Administration, Drake University, Des Moines, United States
Abstract:This paper examines cross-border acquisitions by Indian multinationals and places them in the context of Emerging Country Multinationals. It tests hypotheses based on internalisation theory and the resource based view to ask if these firms are asset exploiting or asset augmenting in their takeover behaviour. Internal financial and technological resources are found to be important explanatory variables, as is asset seeking; of brands, technology and market access. The home environment in India allows firms to amass profits, to manage in a culturally diverse setting and to develop asset bundling skills. All these factors are significant in determining cross-border acquisitions.
Keywords:Firm specific assets  Asset augmentation  Cross-border acquisitions  India  Multinationals from emerging countries  Asset seeking foreign direct investment
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