Time and path dependencies in foreign acquisition behaviours: The history of Danish take-overs abroad

Abstract

Is the present investment behaviour of firms acquiring other firms abroad an outcome of historic tradition and the time period in which the take-over started? For example, avoiding tariffs was a popular strategy in the period before World War I. Today, the build up of competence is a central strategy. Throughout the research period covered in this paper, market access is an important acquisition motive. This paper illustrates acquisition motives as a product of time and path dependencies, seen in the case of Danish industrial firms acquiring foreign firms between 1888 and the early 1990s. When deciding on their first international acquisition, most firms are influenced by the strategic trend of the period. They subsequently follow this motive for decades. However, some firms are able to break this time-related path dependency and follow the prevailing motive of the next period.