FDI from emerging to advanced countries: some insights on the acquisition strategies and on the performance of target firms

The paper deals with acquisitions from emerging to advanced countries and the performances of the target firms. We have used descriptive statistics to investigate the strategies and the impact of the entry of emerging multinational companies (EMNCs) from Brazil, Russia, India and China (BRIC) on the performance of firms acquired in Europe, North America and Japan between 2000 and 2007. The results show that EMNCs do not always acquire firms with a high pre acquisition performance and that they do not significantly increase the post acquisition profitability of the target firms. Nevertheless, EMNCs contribute to increase target firms’ productivity and sales and to slow down their loss of jobs. We also show the importance of the acquisition experience of the acquiring firms. Experienced EMNCs not only acquire firms with a higher pre acquisition performance, but also contribute to increase more significantly the productivity and sales of the target firms. Ultimately, we highlight the differences in the sizes and the technology intensity of the target firms acquired by experienced and inexperienced EMNCs to provide further insights about the strategies and the effects of acquisitions from emerging to advanced countries.

Keywords:Fusioni e acquisizioni, imprese multinazionali emergenti, performance delle imprese target, precedente esperienza d’acquisizione

Jel codes:F23, L25, G3, P47

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Peter J. Buckley, Stefano Elia, Mario Kafouros, FDI from emerging to advanced countries: some insights on the acquisition strategies and on the performance of target firms in "ECONOMIA E POLITICA INDUSTRIALE " 1/2011, pp 181-197, DOI: 10.3280/POLI2011-011007