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Isomorphic or not? Examining cross‐border mergers and acquisitions by Chinese firms, 1985‐2006

Isomorphic or not? Examining cross‐border mergers and acquisitions by Chinese firms, 1985‐2006 Purpose – The purpose of this paper is to examine whether isomorphism and mimetic, coercive, and normative mechanisms apply to cross‐border mergers and acquisitions initiated by Chinese firms. Unlike prior studies, the paper aims to identify multiple bases for imitation of firm strategy and verify: whether the degree of conformity in the multiple bases of firm strategy increases over time; and how mimetic, coercive, and normative pressures affect the degree of conformity. Design/methodology/approach – Hypotheses are tested on a sample of 1,004 cross‐border mergers and acquisitions (M&As) initiated by 671 Chinese firms from 1985 to 2006. The four decisions for imitation in cross‐border M&As are based on: the product relatedness between the acquiring and target firms; the location of the target firm; the ownership structure; and the size of the deal. Findings – The results show that not all decisions on cross‐border M&As react to forces of conformity in the same way. Overtime, the overall degree of conformity in cross‐border M&As decreases. Factors that significantly affect the degree of conformity include the experiences of failure other firms in the industry, regulatory changes, and membership or entry into the World Trade Organization. Originality/value – This paper re‐examines the concept of isomorphism and explores the conditions under which firms from emergent markets conform to others' decisions. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Chinese Management Studies Emerald Publishing

Isomorphic or not? Examining cross‐border mergers and acquisitions by Chinese firms, 1985‐2006

Chinese Management Studies , Volume 3 (1): 15 – Apr 3, 2009

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Publisher
Emerald Publishing
Copyright
Copyright © 2009 Emerald Group Publishing Limited. All rights reserved.
ISSN
1750-614X
DOI
10.1108/17506140910946133
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to examine whether isomorphism and mimetic, coercive, and normative mechanisms apply to cross‐border mergers and acquisitions initiated by Chinese firms. Unlike prior studies, the paper aims to identify multiple bases for imitation of firm strategy and verify: whether the degree of conformity in the multiple bases of firm strategy increases over time; and how mimetic, coercive, and normative pressures affect the degree of conformity. Design/methodology/approach – Hypotheses are tested on a sample of 1,004 cross‐border mergers and acquisitions (M&As) initiated by 671 Chinese firms from 1985 to 2006. The four decisions for imitation in cross‐border M&As are based on: the product relatedness between the acquiring and target firms; the location of the target firm; the ownership structure; and the size of the deal. Findings – The results show that not all decisions on cross‐border M&As react to forces of conformity in the same way. Overtime, the overall degree of conformity in cross‐border M&As decreases. Factors that significantly affect the degree of conformity include the experiences of failure other firms in the industry, regulatory changes, and membership or entry into the World Trade Organization. Originality/value – This paper re‐examines the concept of isomorphism and explores the conditions under which firms from emergent markets conform to others' decisions.

Journal

Chinese Management StudiesEmerald Publishing

Published: Apr 3, 2009

Keywords: Acquisitions and mergers; Multinational companies; Organizational theory; China

References