| RESIDUAL CONTROL AND EMERGING MULTINATIONALS |
Received:October 10, 2017 Revised:October 10, 2017 |
Key Words: emerging multinationals, EMNEs, acquisitions, M&As, residual control |
| Author Name | Affiliation | | Mike W. Peng* | University of Texas at Dallas | | En Xie | Xi’an Jiaotong University | | Joyce C. Wang | University of Texas at Dallas | | Sergey Lebedev | San Francisco State University |
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Abstract: |
| The existence of emerging economy multinationals (EMNEs) necessitates an integrated understanding of two questions regarding their acquisitions abroad. First, why do EMNEs often bid higher for certain targets, especially those in developed economies? Second, why do EMNEs tend to allow targets significant autonomy? Extending residual control theory, we conceptualize an EMNE as a collection of assets in various host countries over which the EMNE has residual control. The determinants of its cross-border acquisition activities—specifically, bidding higher and granting autonomy to certain acquired targets—boils down to its efforts to simultaneously maximize joint value creation and minimize target incentive loss. |
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