How Latin American multinational companies’ institutional capabilities influence ownership in cross-border acquisitions

Authors

DOI:

https://doi.org/10.18568/internext.v18i1.699

Keywords:

Institutional Knowledge, Institutional Environment, Cross-border Acquisitions, Latin America

Abstract

Objective: Multinational Companies (MNCs) can learn from their experience in host countries and develop an ability to deal with specific institutional inefficiencies. We advance that MNCs’ institutional capabilities, or the capabilities to deal with institutionally underdeveloped milieus, will likely lower the ownership requirements in subsequent deals. Method: Using regressions with a secondary dataset of 1,686 cross-border acquisitions (CBA) made by Latin American firms worldwide, we investigate how the MNCs’ priorly-acquired capabilities of operating in countries with underdeveloped regulatory quality, less effective rule of law, and lower corruption control lower the ownership acquired in subsequent acquisition deals. Main Results: We show that MNCs with experiences with CBA in countries with poor institutional contexts learn how to work in those contexts. Hence, these MNCs build capabilities that make them more likely to take a lower ownership stake in future CBAs. Relevance/ Originality: There is still much to be understood regarding the extent to which the knowledge developed in one country could be extrapolated and used in another country with similar problems. We delve into this matter with an institution-based view. Theoretical/ Methodological Contributions: This study thus contributes to a better understanding of the effect of MNCs’ institutional capabilities for operating in institutionally inefficient countries on the ownership stakes required.

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Author Biographies

Christian Falaster, PPGAd & PPGCC - Universidade Regional de Blumenau (FURB)

Professor do Programa de Pós-Graduação em Administração (PPGAd) e do Programa de Pós-Graduação em Ciências Contábeis (PPGCC) da Universidade Regional de Blumenau (FURB). Possui graduação em Comunicação Social pela Universidade Regional de Blumenau (2013), mestrado em Administração pela Universidade Nove de Julho (2015) e doutorado em Administração também pela Universidade Nove de Julho (2017). É editor associado do Iberoamerican Journal of Strategic Management - IJSM (Revista Iberoamericana de Estratégia). Atua na área de Negócios Internacionais como linha de pesquisa principal, dentro das áreas de Estratégia Internacional e Inovação.

Manuel Portugal Ferreira, Department of Management and Economics - Polytechnic of Leiria - CARME – Center of Applied Research in Management and Economics

Professor e investigador nas áreas de estratégia e gestão internacional, no Instituto Politécnico de Leiria, Portugal (1994-). Professor na Universidade Nove de Julho, no PPPGA, São Paulo, Brasil (2012-19). Pós-doutorado pela FEA/USP (2012-2015). Doutorado em Business Administration pela David Eccles School of Business da Universidade de Utah, EUA, (equivalência pela U. de Coimbra, Portugal e validação pela FEA/USP, Brasil) (Fulbright Scholar), MBA e Mestrado pela Universidade Católica Portuguesa (Lisboa) e Licenciado em Economia pela Universidade de Coimbra (validação pela UFSC). Pesquisador bolsista de Produtividade (PQ2/CNPq). Membro do CARME (Center of Applied Research in Management and Economics). Fundador e Diretor do centro de investigação: globADVANTAGE - Center of Research in International Business & Strategy (Centro de Pesquisa em Estratégia e Negócios Internacionais) (2007-2020). Membro do grupo de pesquisa da FEA/USP em Planejamento Estratégico e Empreendedorismo, do grupo de pesquisa da Uninove em Estratégia e Governança. Coordenador de vários projetos de pesquisa financiados. Coordenador de Mestrado (2008-2012). Editor Adjunto da RIAE (Qualis B2) (2012-2019), editor associado e de área (RAUSP, INMR, IJCM, Contextus) e membro do corpo editorial/revisor de vários periódicos (Internext, ISMO, IJCM, IJBBM, ...). Apresentações em conferências nacionais e internacionais e mais de uma centena de artigos científicos em revistas com referee. Coautor dos livros 'Gestão estratégica: Conceitos e prática', 'Estratégia empresarial em diferentes contextos empresariais', 'Gestão empresarial', 'Negócios Internacionais e internacionalização para as economias emergentes', 'Estratégia corporativa', 'Ser empreendedor: Pensar, criar e moldar a nova empresa', 'Casos de estudo: Usar, escrever e estudar', 'Marketing para empreendedores e pequenas empresas', 'Pesquisa em Administração e Ciências sociais aplicadas', publicados em Portugal e/ou no Brasil. A sua pesquisa é centrada em estratégia e em negócios internacionais, em especial com foco na teoria institucional, e questões institucionais de forma ampla, em contextos de operações internacionais.

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Published

2022-12-21

How to Cite

Falaster, C., & Silva Portugal Vasconcelos Ferreira, M. A. (2022). How Latin American multinational companies’ institutional capabilities influence ownership in cross-border acquisitions. Internext - International Business and Management Review, 18(1). https://doi.org/10.18568/internext.v18i1.699

Issue

Vol. 18 No. 1 (2023): Janeiro - Abril

Section

Special Issue: International Business in Latin America & Caribbean

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Copyright (c) 2022 Christian Falaster, Manuel Aníbal Silva Portugal Vasconcelos Ferreira

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