Cross-border Strategic Asset Acquisition by Chinese Multinational Enterprises : Three Essays on Strategic Asset Seeking and Bundling, Springboarding and Post-Acquisition Integration
BP2-STS
- Wu, Juan Université de Fribourg
- Fribourg (Switzerland), [2024]
1 ressource en ligne (192 pages)
PhD: Université de Fribourg (Suisse), 18.12.2023
Entreprises multinationales
Chine
Rachats de sociétés
Fusions d'entreprises
Planifications stratégiques
Actifs (comptabilité)
Achats
Mergers and acquisitions
China
Multinational enterprises
English
In recent decades, the proactive pursuit and acquisition of strategic assets in developed economies (DEs) by emerging multinational enterprises (EMNEs) has significantly reshaped the global economy and garnered substantial academic attention. The number of published articles in this field has more than doubled since the 2000s and continues to grow. However, despite this extensive research, our comprehension of how EMNEs effectively catch up with incumbent West-ern global players and compete on the global stage remains nascent. Longitudinal studies in this domain are exceptionally rare. Addressing this gap, this doctoral thesis draws on an eight-year observation of 14 strategic-asset-seeking acquisitions of Western companies by 10 Chinese multinational enterprises (CMNEs). Through a longitudinal process analysis, it investigates from both the acquired and acquiring firms’ perspectives why, how, and with what outcomes CMNEs seek, acquire, and integrate strategic assets in DEs.
The extant literature argues that cross-border acquisitions by CMNEs in developed coun-tries are motivated by strategic asset seeking. However, a context-related look at the specific stra-tegic assets sought by the acquirers is often missing. Study 1 investigates which specific strategic assets CMNEs pursue, given their own strategic assets, and why they do so, and which assets from the acquiring and acquired companies get bundled, ultimately. This expanded perspective reveals that the interplay of EMNEs' existing country- and firm-specific advantages empowers them to secure acquisition bids and efficiently bundle their own assets with complementary Western assets, thereby creating economic value. This finding further develops asset bundling theory. The study also provides empirical evidence that technology transfer between CMNEs and their acquired firms from DEs occurs in both directions, and that acquirers and acquired companies employ joint innovation to upgrade technology and enhance product offering on both sides.
Study 2 aims to extend the springboard view - one of the most impactful theories for the internationalization of EMNEs - by exploring the heterogeneity and dynamic nature of spring-boarding and contextualizing it from a strategic perspective. Putting strategic assets into the context of CMNEs’ springboard internationalization activities and path-breaking changes, it reveals four distinct springboard trajectories from four inward internationalization to three catch-up strategy types:
- Group 1: from ‘low-cost partner’ to ‘brand firm and full-range provider’ by acquiring brand firms;
- Group 2: from ‘local optimizer’ to ‘brand firm and full-range provider’ by acquiring brand firms;
- Group 3: from ‘regional consolidator’ to ‘global consolidator’ by acquiring Western firms with overseas production facilities;
- Group 4: from ‘first mover in specific technology’ to ‘total solution provider’ by ac-quiring firms with up- and downstream cutting-edge technology.
The trajectories of group 1, 2, and 4 significantly deviate from the general upward spiral model suggested by Luo and Tung (2018a). The heterogeneity of the trajectories sheds a new light on the diversity, dependencies, and influencing factors of the springboard process. Furthermore, the study proposes a multilayer framework to explain the determinants of the heterogeneity of springboard trajectories. These trajectories are determined by the companies’ specific catch-up strategy, which in turn is driven by the global ambition, the inward internationalization strategy shaped by the initial asset endowment, and industry characteristics.
A large number of empirical studies support the notion that EMNEs, notably CMNEs, adopt a light-touch integration approach (LTIA) characterized by granting the acquired firms considerable autonomy whilst engaging in selective business coordination. Study 3 explores the clearly under-researched evolution of LTIA and its drivers. Three distinct integration paths are revealed, all starting with light-touch integration but morphing to different target models, either another form of light touch—overall six varying forms of them being identified—or absorption. The differing integration paths can be explained by a driving system. The determinant of integration evolution is the catch-up strategy—three of them being identified. Resource dependency and cultural distance are the steering drivers through which the transition from the preliminary integration form towards the target model is managed.
Through its longitudinal approach, this thesis delves into the catch-up process of the sample CMNEs from a strategic perspective. It extends existing theories by adapting them and introducing novel models. The thesis carries significant managerial implications. By selecting successful cases, it presents ‘best practices’ for strategic asset seeking, bundling, and integration. For Western managers, these cases convey a pivotal lesson: Successful acquirers from emerging markets consistently adhere to their strategy—be it in asset seeking, bundling, or integration. To effectively respond to EMNEs' activities and behaviours, rather than merely tactical reacting, one must gain a deep understanding of EMNEs' strategies.
The extant literature argues that cross-border acquisitions by CMNEs in developed coun-tries are motivated by strategic asset seeking. However, a context-related look at the specific stra-tegic assets sought by the acquirers is often missing. Study 1 investigates which specific strategic assets CMNEs pursue, given their own strategic assets, and why they do so, and which assets from the acquiring and acquired companies get bundled, ultimately. This expanded perspective reveals that the interplay of EMNEs' existing country- and firm-specific advantages empowers them to secure acquisition bids and efficiently bundle their own assets with complementary Western assets, thereby creating economic value. This finding further develops asset bundling theory. The study also provides empirical evidence that technology transfer between CMNEs and their acquired firms from DEs occurs in both directions, and that acquirers and acquired companies employ joint innovation to upgrade technology and enhance product offering on both sides.
Study 2 aims to extend the springboard view - one of the most impactful theories for the internationalization of EMNEs - by exploring the heterogeneity and dynamic nature of spring-boarding and contextualizing it from a strategic perspective. Putting strategic assets into the context of CMNEs’ springboard internationalization activities and path-breaking changes, it reveals four distinct springboard trajectories from four inward internationalization to three catch-up strategy types:
- Group 1: from ‘low-cost partner’ to ‘brand firm and full-range provider’ by acquiring brand firms;
- Group 2: from ‘local optimizer’ to ‘brand firm and full-range provider’ by acquiring brand firms;
- Group 3: from ‘regional consolidator’ to ‘global consolidator’ by acquiring Western firms with overseas production facilities;
- Group 4: from ‘first mover in specific technology’ to ‘total solution provider’ by ac-quiring firms with up- and downstream cutting-edge technology.
The trajectories of group 1, 2, and 4 significantly deviate from the general upward spiral model suggested by Luo and Tung (2018a). The heterogeneity of the trajectories sheds a new light on the diversity, dependencies, and influencing factors of the springboard process. Furthermore, the study proposes a multilayer framework to explain the determinants of the heterogeneity of springboard trajectories. These trajectories are determined by the companies’ specific catch-up strategy, which in turn is driven by the global ambition, the inward internationalization strategy shaped by the initial asset endowment, and industry characteristics.
A large number of empirical studies support the notion that EMNEs, notably CMNEs, adopt a light-touch integration approach (LTIA) characterized by granting the acquired firms considerable autonomy whilst engaging in selective business coordination. Study 3 explores the clearly under-researched evolution of LTIA and its drivers. Three distinct integration paths are revealed, all starting with light-touch integration but morphing to different target models, either another form of light touch—overall six varying forms of them being identified—or absorption. The differing integration paths can be explained by a driving system. The determinant of integration evolution is the catch-up strategy—three of them being identified. Resource dependency and cultural distance are the steering drivers through which the transition from the preliminary integration form towards the target model is managed.
Through its longitudinal approach, this thesis delves into the catch-up process of the sample CMNEs from a strategic perspective. It extends existing theories by adapting them and introducing novel models. The thesis carries significant managerial implications. By selecting successful cases, it presents ‘best practices’ for strategic asset seeking, bundling, and integration. For Western managers, these cases convey a pivotal lesson: Successful acquirers from emerging markets consistently adhere to their strategy—be it in asset seeking, bundling, or integration. To effectively respond to EMNEs' activities and behaviours, rather than merely tactical reacting, one must gain a deep understanding of EMNEs' strategies.
- Faculty
- Faculté des sciences économiques et sociales et du management
- Language
-
- English
- Classification
- Economics
- Notes
-
- Bibliographie
- License
- CC BY-NC
- Open access status
- diamond
- Identifiers
-
- SWISSCOVERY 991172312924705501
- DOI 10.51363/unifr.eth.2024.014
- URN urn:nbn:ch:rero-002-122764
- Persistent URL
- https://folia.unifr.ch/unifr/documents/331476
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