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Browsing Sykes College of Business (COB) by Subject "Economic distance"
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Item Age Matters: The Contingency of Economic Distance and Economic Freedom in Emerging Market Firm’s Cross-Border M&A Performance(Springer Nature, 2019) Liou, Ru-Shiun; Rao-Nicholson, RekhaThe primary studies on emerging market multinational firms (EMFs) thus far have depicted a picture of accelerated internationalization in which EMFs conduct a series of aggressive cross-border acquisitions to further enhance their competitive advantage. However, it is not clear whether the EMFs which conducted the acquisitions at a young age experience better performance. EMFs constrained by their home market development in economic institutions may encounter different challenges in their cross-border acquisitions. Using a sample of South African firms’ acquisitions between 1994 and 2012, we find support for the benefit of foreign acquisitions at a young age as well as the moderation effects of economic distance and economic freedom. While early inorganic growth provides an excellent opportunity to propel South African firms’ growth, the country level factors present important boundary conditions to examine the benefit of early internationalization. While facing a significant economic distance, older firms are better at utilizing their experience and experience better post-acquisition operating performance. By contrast, the younger firms benefit more from the post-acquisition when the home country has weaker economic freedom.Item What’s in a name? Cross-national distances and subsidiary’s corporate visual identity change in emerging-market firms’ cross-border acquisitions(Emerald Publishing Limited, 2018) Liou, Ru-Shiun; Rao-Nicholson, Rekha; Sarpong, DavidPurpose – Addressing the unique challenge facing emerging-market firms (EMFs) of branding and marketing in their foreign subsidiaries, this study evaluates the foreign subsidiary corporate visual identity (CVI) transitions during the post-acquisition period. Design/Methodology/approach – Data on 330 cross-border acquisitions from five emerging-markets, namely, Brazil, China, India, Russia and South Africa (BRICS) are used. The cross-sectional multivariate analyses are used to test the hypotheses. Findings – Utilizing a sample of worldwide acquisitions conducted by EMFs originated from BRICS, this study establishes that various cross-national distances do not consistently cause the targets to take on the parent’s CVI. While economic distance and formal institutional distance increases the likelihood of an acquired subsidiary’s CVI change, cultural distance decreases the likelihood of CVI change. Practical implications – Lacking international experience and shaped by national differences between the host and home markets, EMFs often grant foreign subsidiaries substantial autonomy to respond to diverse stakeholder demands in subsidiary branding. Contrary to extant literature, the findings show that some distances are more pertinent to CVI transformation in the subsidiaries than others in the context of the EMFs. Originality/value – This research shows that the formal institutional distance and economic distance, will increase the likelihood of CVI changes in the subsidiaries, whereas, the cultural distance requiring soft skills like the cultural adaptability from the EMFs will decrease the CVI change possibility. The findings presented in the paper have significant implications for future research and strategic application.