Technology-acquiring cross-border M&As by emerging market firms: role of bilateral trade openness

ABSTRACT

This paper investigates the role of bilateral trade openness in technology-acquiring cross-border mergers and acquisitions (M&As) by emerging market firms (EMFs). The cross-border M&A, patents, and financial data from January 2000 to December 2013 have been utilised for empirical analyses. By analysing cumulative abnormal returns of the acquirer EMFs from Brazil, Russia, China, India, and Mexico, the value-creating nature of technology-acquiring cross-border M&As has been confirmed. In addition, the number of the patents owned by the target firms showed a positive and significant effect on the stock performance of cross-border acquirers. Finally, the bilateral trade openness significantly and positively moderated the relation between the innovation capability of the target firms and EMFs’ stock performance.

KEYWORDS:

• Emerging market firms
• technology acquisition
• cross-border M&A
• institution

Acknowledgements

The authors are grateful to two anonymous referees for their comments on an earlier draft.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on contributors

Hyungseok (David) Yoon is a professor at École de Management Léonard De Vinci (EMLV) in France. His research is focused on cross-border M&A and technological entrepreneurship from emerging economies. Dr Yoon holds a Ph.D. in Management from KAIST, Master of Science in Industrial Systems Engineering from Yonsei University, and Bachelor of Arts in Spanish from Hankuk University of Foreign Studies. He has published in leading journals including Research Policy and Technological Forecasting and Social Change.

Joosung J. Lee is an associate professor in the Department of Business and Technology Management at KAIST. He has expertise in open innovation and entrepreneurship research. Dr Lee has held research and teaching positions at Tokyo University and Yonsei University and published in leading journals including Research Policy, Transportation Research and Technological Forecasting and Social Change. He has served as a managing editor of the Technology and Innovation Management journal published by Korea Industrial Technology Association.

ORCID

Hyungseok (David) Yoon http://orcid.org/0000-0003-1423-9808