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Although cross-border acquisitions are prevalent, many of these transactions fail to complete. This study contributes to extant research by examining how to enhance this completion via learning vicariously from foreign acquirers in a firm's home country (inbound foreign acquirers). Drawing upon vicarious learning and knowledge spillover theories, we argue that firms not only learn from their direct experience but from inbound foreign acquirers, which subsequently help increase the completion rate of outbound foreign acquisitions by the former. Our analysis based on 2,768 outbound acquisition deals by firms from 41 emerging economies during 2003-2016 shows that inbound acquisitions conducted by foreign MNEs in an emerging market exert a positive impact on the completion likelihood of outbound acquisitions conducted later by emerging market firms from this country. Moreover, this positive effect is stronger if the industry relatedness between the foreign acquirers and a focal EMNE is higher, or if the institutional distance between the focal EMNE's home country and its target firm's country is lower. [ABSTRACT FROM AUTHOR]

We analyze the impact of informal entrepreneurship on innovation in emerging economies. We build on agency theory to argue that formal new ventures that were informally created engage more in imitative new product development and less in innovative new product development, because they suffer from informality costs. We also propose that the agency costs of owners of the informally created formal new ventures modify informality costs. Specifically, we argue that foreign and private business group ownership compensates for informality costs while state ownership heightens them, altering the impact of informal creation on imitative and innovative new product development. [ABSTRACT FROM AUTHOR]

This paper examines the impact of cross-border acquisitions on the subsequent innovation of acquiring firms in their home countries using emerging market multinationals (EMNEs) as an example. Drawing on the complementary insights of capability catchup and cross-border acquisitions, we submit that EMNEs have a greater chance to improve their innovation at home through cross-border acquisitions, yet this improvement hinges on their orchestration of newly acquired resources and existing resources. We find that characteristics in home country (i.e., high prior R&D investment, weak innovativeness of industry peers, and strong pro-market institutions) and the relatedness between acquiring and acquired firms (i.e., vertically related acquisitions) will make the orchestration more effective and valuable, leading to a stronger innovation-enhancing effect. A longitudinal analysis based on Chinese publicly listed firms during the period from 2000 to 2016 supported the above arguments. [ABSTRACT FROM AUTHOR]

We analyze how multinational subsidiaries overcome deficiencies in infrastructure in developing economies. Drawing insights from the resource dependence theory, we explain how a subsidiary‟s dependence on host country‟s soft infrastructure or institutions and hard or physical infrastructure becomes a critical constraint under which it has to strategically respond. We propose three ideas. First, we propose that the degree of infrastructure deficiencies in a developing economy constrains the subsidiary‟s investment scale in the country. Second, the subsidiary can overcome these constraints using three strategies: adaptation, or gaining experience in operating with deficient infrastructure; influencing or lobbying the government to reduce uncertainty in investment; and escape, or reducing exposure to deficient infrastructure by seeking foreign markets. Third, the first two strategies are more effective in addressing hard infrastructure deficiencies and the last strategy is more effective in redressing soft infrastructure deficiencies. We developed the logic that dependency on soft infrastructure is harder to alter due to the host government‟s dominant institutional role, whereas the dependency on hard infrastructure is easier to reduce because third parties (e.g., private physical infrastructure builders) may exist as alternative providers. We test our arguments on a sample of 2,746 subsidiaries operating in 56 developing economies during 2006-2014. [ABSTRACT FROM AUTHOR]

It is recognized that many emerging market multinationals (EM MNEs) are risk-taking or radical when undertaking outbound FDI. Risk-taking, however, is profoundly endogenous and therefore it is misleading to assume that all EM MNEs have high risk-taking propensity nor is an ambitious EM MNE necessarily radical in all its IB activities. This study thus examines endogenous conditions under which EM MNEs tend to be more risk-taking in entering and competing overseas. We seek to understand which firm-specific forces importantly affect these firms risk-taking orientation, risk-taking entry modes, and risk-taking geographic dispersion. Our analysis, based on 228 EM MNEs from China, shows that firms with a greater extent of strategic asset-seeking intent, state ownership, and inward internationalization present significantly higher risk-taking orientation, risky modes such as acquisitions or greenfield FDI, and rapid and aggressive geographic dispersion. Moreover, a firm's financial munificence plays an important role in further increasing the main influence of these endogenous conditions. We discuss the potential implications of our propositions and findings to renew scholarly interests in IB risk management in general and our continuous understanding of EM MNEs behaviors and strategies in particular. [ABSTRACT FROM AUTHOR]

Building on signaling theory, we analyze how firms from emerging countries can address the negative impact of the liability of emergingness in exports. Because of information asymmetries, firms from emerging countries suffer from a liability of emergingness in their exports, i.e. the spillover of the negative stereotype of their home countries' weak institutions on the perceptions of firm quality. We propose that firms can overcome this liability by using upgrading mechanisms as information cues to signal their excellence to foreign customers. We also propose that while all upgrading mechanisms are beneficial in this regard, explicit mechanisms such as obtaining an international certification or licensing a foreign technology are more effective in reducing the effect of weak institutions on firm exports, than implicit ones such as recruiting skilled labor. The difference in signaling effectiveness among upgrading mechanisms is even more prominent in low- tech industries where products are more commoditized and thus the need for firms to use explict signaling to indicate quality is stronger. Our arguments are supported in a study of 44,413 firms from 97 emerging countries between 2006 and 2016. [ABSTRACT FROM AUTHOR]

We present a composition-based logic toward international expansion by emerging market firms (EMFs) - firms that use compositional investment, compositional competition, and compositional collaboration to create a unique competitive advantage in global competition. This view explains how EMFs creatively adopt a composition-based international strategy, enabling them to compensate for their weaknesses while capitalizing on their strengths during global competition where they offer a competitive price-value ratio suited to a wide range of global customers. We further examine the enhancing forces (i.e., strategic resource-seeking motivation, autonomy delegation, and cross-border sharing system) that fortify the outcome of composition. Using survey data from 227 EMFs from China, our empirical results support these key arguments. A composition-based lens provides a better understanding of why and how emerging market businesses can survive in international competition for some period of time without possessing traditionally defined monopolistic advantages in global competition. [ABSTRACT FROM AUTHOR]