Multinational enterprises, intra-regional cross-border M and As, and performance: Location advantages of market versus knowledge

Lee, In Hyeock (Ian); Hong, Eunsuk; Shin, Jong Kook

Abstract

Building on the theories of internalization and regional MNEs and using a sample of 11,098 cross-border M&As in 1997–2017, this study investigates performance implications of MNEs’ cross-border M&As aimed to locate overseas market potential versus knowledge endowment, in terms of intra-regional vis-à-vis inter-regional M&As. The main findings from this study are threefold: (1) Intra-regional cross-border M&As’ positive effects on their completion and post-merger operating performance are location advantage-specific phenomena; (2) When cross-border M&As are geared towards those foreign countries of strong market potential, intra-regional cross-border M&As are more likely to be completed, and followed by better post-merger operating performance of the acquirers than their inter-regional counterparts; and (3) When cross-border M&As are targeted towards those foreign countries endowed with sophisticated knowledge, intra-regional cross-border M&As are less likely to be completed, and do not seem to help the acquirers achieve better post-merger operating performance, compared to their inter-regional counterparts. The study concludes with important theoretical, practical, and public policy implications.

Citation

Lee, I. H. (., Hong, E., & Shin, J. K. (2023). Multinational enterprises, intra-regional cross-border M and As, and performance: Location advantages of market versus knowledge. International Business Review, 32(6), Article 102177. https://doi.org/10.1016/j.ibusrev.2023.102177

• Journal Article Type: Article
• Acceptance Date: Aug 16, 2023
• Online Publication Date: Sep 6, 2023
• Publication Date: Dec 1, 2023
• Deposit Date: Sep 9, 2023
• Publicly Available Date: Sep 7, 2026
• Journal: International Business Review
• Print ISSN: 0969-5931
• Electronic ISSN: 1873-6149
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 32
• Issue: 6
• Article Number: 102177
• DOI: https://doi.org/10.1016/j.ibusrev.2023.102177
• Keywords: Cross-border M&A deals, Regionalization, Location advantages, Intra-regional M&As, Deal completion, Post-merger performance
• Additional Information: Data Access Statement : The authors do not have permission to share data.