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Acquisitions by emerging market multinationals: Implications for firm performance

Networked Multinational Enterprises in the Modern Global Economy

Peter J. Buckley, Stefano Elia and Mario Kafouros

This study develops and tests a framework about the resource - and context-specificity of prior experience in acquisitions. Although extant research has explained why multinational companies from emerging countries (EMNSc) acquire companies in developed countries, we have an incomplete and inconsistent understanding of the consequences of such acquisitions for the performance of target firms. First, we show that despite the concerns raised by politicians and the general public in developed countries, the acquisitions made by EMNCs often enhance the performance of target firms. Second, we examine whether the role of EMNCs' idiosyncratic resources (such as access to new markets and cheap production facilities) and investment experience in enhancing the performance of target firms differs across acquisition contexts.