The drivers of domestic acquisitions in People's Republic of China: a resource-based analysis

Abstract

Domestic acquisitions of firms in emerging markets have so far evaded scholarly interest. This article contributes to closing this gap by looking into the drivers of cross-province acquisitions in the People's Republic of China, covering 569 deals in manufacturing industry conducted between 1999 and 2012. Drawing on the resource-based view, this study looks at prior Chief Executive Officer (CEO) experience and organizational slack as two drivers of cross-province acquisitions, and analyses the moderating effects of firm ownership types and the location of an acquiring firm. The results show that private firms having CEOs with experience outside of the home province are the drivers of cross-province acquisitions in China.

Keywords::

• acquisitions
• China
• CEO experience
• People's Republic of China
• organizational slack
• resource-based view
• state-owned enterprises

Notes

^1. Henceforward, a CEO's home province is referred to a province where an acquiring firm is headquartered.

^2. In line with prior studies (e.g. Chen and Groenewold 2013), coastal group of provinces consists of Beijing, Tianjin, Hebei, Liaoning, Shanghai, Jiangsu, Zhejiang, Fujian, Shandong, Guangdong and Guangxi. All the rest provinces are classified as inland.

Additional information

Notes on contributors

Yulia Muratova

Yulia Muratova is a Ph.D. student researching and teaching at the Department of Business Administration, School of Business and Social Sciences, Aarhus University, Denmark, and an affiliate with Sino-Danish Centre for Education and Research (SDC). She received her master's degree in International Relations from Loughborough University (UK), her master's degree in Research Methods and her bachelor's degree in Economic Sociology from the Higher School of Economics (Russia). She also has work experience in various research-related positions in business, government and public sector in both Russia and the UK. Her current research interest includes firm growth strategy in emerging ma3rkets, with particular focus on China and Russia.