Journal of Corporate Finance Vol. 17 No. 2 2011
Partial acquisitions in emerging markets: A test of the strategic market entry and corporate control hypotheses
Abstract
In this paper, we examine the motivations of acquirers undertaking partial acquisitions in emerging markets by testing two competing hypotheses: the market for corporate control hypothesis and the market entry hypothesis. We find that targets of cross-border acquisitions outperform targets of domestic acquisitions in the pre-acquisition period. While cross-border acquisitions have no significant impact on target firms' operating performance, targets of domestic acquisitions experience significant improvements in operating performance and substantial changes in ownership structure after the acquisition. The evidence suggests that domestic partial acquisitions in emerging markets serve as a market for corporate control, while cross-border partial acquisitions are motivated by the strategic market entry rationale.
- DOI
- 10.1016/j.jcorpfin.2010.09.003
- Volume
- 17
- Issue
- 2
- Pages
- 288-305
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref