The choice of partial versus full acquisition modes in cross-border deals and the contingent role of industries

2023 Fiscal Year Research-status Report

• Project/Area Number: 23K12544
• Research Institution: Kobe University
• Principal Investigator: AHMED KASHIF 神戸大学, 経済経営研究所, 助手 (10962954)
• Project Period (FY): 2023-04-01 – 2025-03-31
• Keywords: Crossborder acquisitions

Outline of Annual Research Achievements

The research contributes to our understanding of how industry characteristics and institutional distance influence equity sought in cross-border acquisitions using polynomial regression and survey curve analysis. We conceptualize institutional distance as the difference in governance quality between the acquirer and target countries. Our model demonstrates that industry characteristics such as munificence, dynamism, and complexity moderate the impact of institutional distance on equity-seeking behavior. These factors influence strategic decisions in international M&A. Understanding these dynamics is vital for global business strategy and policymaking.

Current Status of Research Progress

2: Research has progressed on the whole more than it was originally planned.

Reason

We can proceed smoothly because we have access to recent research literature essential for our model. For example, access to research papers on industry characteristics such as Malhotra & Harrison (2022) and other literature like Busenbark et al. (2023) enables us to advance our research seamlessly.
Full reference:
Busenbark, J. R., Bundy, J., & Chin, M. K. (2023). Director departure following political ideology (in) congruence with an incoming CEO. Strategic Management Journal, 44(7), 1698-1732.
Malhotra, S., & Harrison, J. S. (2022). A blessing and a curse: How chief executive officer cognitive complexity influences firm performance under varying industry conditions. Strategic Management Journal, 43(13), 2809-2828.

Strategy for Future Research Activity

One possible future research direction is to empirically test the model using data on cross-border acquisitions. To measure institutional distance, data from the Worldwide Governance Indicators can be employed. To assess industry characteristics, we can utilize data on the sales of all firms within specific industries. Taking a more long-term view, subsequent firm performance following cross-border acquisitions can also be examined. To focus on the role of managers, a questionnaire study based on experimental design will provide strategic insights for businesses operating in global markets.

Causes of Carryover

In the coming year, I plan to present this research at international conferences and conduct a questionnaire study based on experimental design to make progress on this research.