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Purpose-When entering foreign markets, multinationals can acquire part of a foreign firm and can increase or decrease their equity stake over time. However, extant studies have mainly focused on equity stake acquired during initial market entry. The paper aims to discuss this issue.
Design/methodology/approach-This study fills this gap by using th...
Contexts in source publication
Context 1
... the 1977 model is referenced where necessary. The two versions of the internationalization process model are shown in Figure 1. The 1977 model is shown in Figure 1(a) and the 2009 model is shown in Figure 1(b). ...
Context 2
... two versions of the internationalization process model are shown in Figure 1. The 1977 model is shown in Figure 1(a) and the 2009 model is shown in Figure 1(b). The main difference between the 1977 model ( Johanson and Vahlne, 1977version ( Johanson and Vahlne, 2009) is the role of business networks in internationalization. ...
Context 3
... two versions of the internationalization process model are shown in Figure 1. The 1977 model is shown in Figure 1(a) and the 2009 model is shown in Figure 1(b). The main difference between the 1977 model ( Johanson and Vahlne, 1977version ( Johanson and Vahlne, 2009) is the role of business networks in internationalization. ...
Context 4
... the 1977 model is referenced where necessary. The two versions of the internationalization process model are shown in Figure 1. The 1977 model is shown in Figure 1(a) and the 2009 model is shown in Figure 1(b). ...
Context 5
... two versions of the internationalization process model are shown in Figure 1. The 1977 model is shown in Figure 1(a) and the 2009 model is shown in Figure 1(b). The main difference between the 1977 model ( Johanson and Vahlne, 1977version ( Johanson and Vahlne, 2009) is the role of business networks in internationalization. ...
Context 6
... two versions of the internationalization process model are shown in Figure 1. The 1977 model is shown in Figure 1(a) and the 2009 model is shown in Figure 1(b). The main difference between the 1977 model ( Johanson and Vahlne, 1977version ( Johanson and Vahlne, 2009) is the role of business networks in internationalization. ...
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Citations
... In the specific foreign acquisition literature, the antecedents that predict full versus partial acquisitions have received considerable scholarly attention (Ahammad, Leone, Tarba, Glaister, & Arslan, 2017;Ahammad, Konwar, Papageorgiadis, Wang, & Inbar, 2018;Arslan & Wang, 2015;Chari & Chang, 2009;Chen & Hennart, 2004;Contractor et al., 2014;Dikova, Panibratov, & Veselova, 2019;Dow, Cuypers, & Ertug, 2016;Gaffney, Karst, & Clampit, 2016;Malhotra et al., 2018;Oguji, Owusu, & Larimo, 2019;Pinto, Ferreira, Falaster, Fleury, & Fleury, 2017). Extant literature have also addressed the impact of foreign acquired ownership on the short-term market value of acquiring (Chari, Quimet, & Tesar, 2010;Larimo & Pynnönen, 2008;Lopez-Duarte & Garcia-Canal, 2004;Lopez-Duarte & Vidal-Suarez, 2008;Yang, 2015) and acquired firms (Dang & Henry, 2016). ...
... Finland is an interesting research context because its medium-and large-sized firms have relied on internationalization for growth. Although Finnish firms are highly internationalized, they face profound challenges in foreign acquisitions due to their relatively small firm size compared to firms from large economies like the USA and Japan (Laanti et al., 2009;Oguji et al., 2019). Furthermore, statistics have indicated that Finnish firms have been intensively restructuring their global production networks, resulting significant divestments in the past decades (UNCTAD (United Nations Conference on Trade & Development), 2015, 2016). ...
... This study has important managerial implications since it helps buying firms from Finland (perhaps also from other SMOPECs) to increase their chance of survival in foreign markets since the smallness of Finnish firms confers greater challenges in their foreign acquisitions compared to their counterparts from large economies such as Japan and the USA (Laanti et al., 2009;Oguji et al., 2019). This study suggests that managers of Finnish investing firms should take into account different types of internationalization experience and host country conditions when they design ownership structure of foreign acquired units. ...
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.
