Global Meets Local: Community, Political Ideology, and Chinese Cross-Border M&As in the U.S.
HKUST IEMS Thought Leadership Brief No. 74
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Cross-border M&As are risky. And many announced cross-border M&A deals cannot be completed due to various reasons. Such a fact is especially true with firms coming from emerging markets acquiring targets located in developed countries. For example, one research reported that 32.5% of 3,483 cross-border M&As involving EMNCs from BRIC (Brazil, Russia, India, and China) failed to conclude when the acquisition targets were located in developed countries, in contrast with the 18% failure rate recorded for cross-border M&As between developed countries.
In the context of the U.S., we find that political ideology of the local communities serves as an important yet over-looked factor that influences the success of Chinese THOUGHT LEADERSHIP BRIEF SPRING 2023 no.74 PDF & Additional Materials iems.ust.hk Danqing Wang Global Meets Local: Community, Political Ideology, and Chinese Cross-Border M&As in the U.S. acquisitions. Specifically, Chinese M&A deals are less likely to complete in more conservative communities than in more liberal communities, because local stakeholders perceive greater uncertainty and threats posed by foreign acquirers and thus harbor negative attitudes toward such deals in conservative communities.
About the Author
Danqing Wang is an assistant professor in the department of management at the Hong Kong University of Science and Technology. She obtained her Ph.D. in management from INSEAD, France. Her research focuses on state-firm interactions and firms’ non-market strategies in emerging economies. Her work has appeared at Administrative Science Quarterly and Academy of Management Journal, and will appear at Journal of International Business Studies and Journal of Business Ethics. She is currently serving on the editorial board of Administrative Science Quarterly and Management and Organization Review. She is the recipient of the WAIB emerging woman scholar award for 2018 and has also received the Faculty Outstanding Teacher award in 2018 when working at the University of Hong Kong. More >>
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