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Springboard internationalization by emerging market firms: Speed of first cross-border acquisition

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Abstract

According to the springboard perspective, emerging market multinationals seek strategic assets aggressively from the outset. In this paper, we investigate the role of firms’ institutional embeddedness in terms of age and affiliation to business group on their aggressive internationalization pursuits, an issue which has remained less explored in international business scholarship. This study, based on 8163 Indian listed firms over 18 years, identifies a trend that younger firms founded in the liberalized era, post 1991, and unaffiliated firms are more likely to pursue aggressive internationalization by conducting their first cross-border acquisition (CBA) faster. Among affiliated firms, younger ones are relatively faster in conducting their first CBA. Furthermore, the evidence signals a moderating impact of inter-group heterogeneity in terms of group-level assets and foreign investments on the relationship between firm age and aggressive internationalization.

Résumé

Selon la perspective du tremplin, les multinationales des marchés émergents (EMNE) cherchent d’emblée agressivement des actifs stratégiques. Dans cet article, nous examinons le rôle de l’encastrement institutionnel des entreprises en termes d’âge et d’affiliation à des groupes d’entreprises dans le cadre de leurs démarches agressives d’internationalisation, une question qui n’a pas été suffisamment explorée dans la recherche en international business. Cette étude, fondée sur 8 163 entreprises indiennes cotées en bourse sur une période de 18 ans, identifie une tendance selon laquelle les entreprises plus jeunes fondées à l’ère de la libéralisation, après 1991, et les entreprises non affiliées sont plus susceptibles de poursuivre une internationalisation agressive en effectuant leur première acquisition transfrontalière (ATF) plus rapidement. Parmi les entreprises affiliées, les plus jeunes sont relativement plus rapides pour mener leur première ATF. En outre, les éléments de preuve indiquent un impact modérateur de l’hétérogénéité entre les groupes en termes d’actifs au niveau du groupe et d’investissements étrangers sur la relation entre l’âge de l’entreprise et l’internationalisation agressive.

Resumen

De acuerdo con la perspectiva del trampolín, las multinacionales de mercados emergentes (EMNE) buscan activos estratégicos agresivamente desde el comienzo. En este artículo, investigamos el rol del arraigo institucional de las empresas en términos de edad y afiliación al grupo empresarial en sus búsquedas agresivas de internacionalización, un tema que ha quedado menos explorado en los estudios de negocios internacionales. Este estudio basado en 8163 empresas indias que cotizan en bolsa durante más de 18 años, identifica una tendencia que las empresas más jóvenes fundadas en la era liberalizada, posterior a 1991 y las empresas no afiliadas tienen son más propensas a buscar una internacionalización agresiva llevando a cabo su primera adquisición internacional (CBA) más rápido. Entre las empresas afiliadas, las más jóvenes son relativamente más rápidas para llevar a cabo su primera adquisición internacional. Además, la evidencia señala un impacto moderador de la heterogeneidad entre grupos en términos de activos a nivel de grupo e inversiones extranjeras en la relación entre la edad de la empresa y la internacionalización agresiva.

Resumo

De acordo com a perspectiva “springboard”, multinacionais de mercados emergentes (EMNE) buscam agressivamente ativos estratégicos desde o início. Neste artigo, investigamos o papel da inserção institucional das empresas em termos de idade e filiação a grupo empresarial em suas agressivas atividades de internacionalização, uma questão que tem permanecido pouco explorada em pesquisas sobre negócios internacionais. Este estudo, baseado em 8.163 empresas indianas listadas em um período de 18 anos, identifica uma tendência que empresas mais jovens criadas na era liberalizada, após 1991, e empresas não afiliadas são mais propensas a buscar uma internacionalização agressiva conduzindo sua primeira aquisição transfronteiriça (CBA) mais rapidamente. Entre empresas afiliadas, as mais jovens são relativamente mais ágeis para realizar sua primeira CBA. Além disso, evidências indicam um impacto moderador da heterogeneidade intergrupo em termos de ativos em nível de grupo e investimentos estrangeiros na relação entre a idade da empresa e a internacionalização agressiva.

摘要

根据跳板观点, 新兴市场跨国企业(EMNE)从一开始就积极寻求战略资产。在本文中, 我们调查了企业的制度嵌入在年龄和与企业集团关系方面对其积极国际化追求的影响, 这个问题在国际商务文献中仍未被探讨过。这项研究基于8,163家印度上市公司在18年间的数据, 发现了一个趋势, 即在自由化时代建立的年轻的公司、1991年后的以及非附属的公司更有可能通过更快地进行首次跨境收购(CBA)来推行积极的国际化。在附属公司中, 年轻的公司开展首个CBA的速度相对较快。 此外,有证据表明,在集团层面的资产和外国投资方面, 集团间的异质性对企业年龄与积极国际化之间的关系有调节影响。

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Authors and Affiliations

  1. Discipline of International Business, University of Sydney, Abercrombie Building H70, Darlington, NSW, 2006, Australia

    Vikas Kumar & Anish Purkayastha

  2. School of Business-Camden, Rutgers University, 227 Penn Street, Camden, NJ, 08102-1656, USA

    Deeksha Singh

  3. Indian Institute of Management, Prabandh Shikhar, Rau Pithampur Road, Indore, MP, 453556, India

    Manish Popli

  4. Department of Management and Global Business, Rutgers Business School - Newark and New Brunswick, 1 Washington Park, Newark, NJ, 07102, USA

    Ajai Gaur

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  1. Vikas Kumar
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  2. Deeksha Singh
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Accepted by Yadong Luo, Senior Editor, 27 July 2019. This article has been with the authors for three revisions.

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Kumar, V., Singh, D., Purkayastha, A. et al. Springboard internationalization by emerging market firms: Speed of first cross-border acquisition. J Int Bus Stud 51, 172–193 (2020). https://doi.org/10.1057/s41267-019-00266-0

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