Degree of equity ownership in cross-border acquisitions of Brazilian firms by multinationals: a strategic response to institutional distance

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• 作者：Manuel Anibal Silva Portugal Vasconcelos Ferreira^a ; ^b ; ^{manuel.portugal.ferreira@gmail.com} ; Simone Cé ; sar da Silva Vicente^b ; Felipe Mendes Borini^c ; Martinho Isnard Ribeiro de Almeida^c
• 关键词：Institutional environment ; Institutional distance ; Cross-border acquisitions ; Brazil ; Uncertainty reduction strategy
• 刊名：Revista de Administração
• 出版年：2017
• 出版时间：January-March 2017
• 年：2017
• 卷：52
• 期：1
• 页码：59-69
• 全文大小：854 K
• 卷排序：52

文摘

This study analyzes how foreign multinational enterprises respond to uncertainty in their cross-border acquisitions in emerging economies and, specifically in Brazil, given the institutional differences that separate the home and host countries. We analyze how institutional distance impacts multinational enterprises strategy in taking a partial or full ownership stake in their Brazilian acquisitions. We propose that the equity stake is a strategic response to the uncertainty of operating in institutionally distant countries. In an study based on secondary data of 736 acquisitions between 2008 and 2012, we tested statistically the relation between nine dimensions of institutional distance and the equity stake acquired. Results show differentiated effects albeit with significant evidence that greater geographic distance lead multinational enterprises to take a partial equity stake, while financial and cultural distance leads to a full acquisition. This study has two contributions: reinforces the understanding of the institutional challenges of entering emerging economies, and puts forth how firms’ strategies may incorporate structural solutions that minimize risks and investments when facing institutional uncertainties.