The Decision to Stay or Resign Following an Acquisition by a Chinese or Indian Company

Document Type

Article

Department or Administrative Unit

IT and Administrative Management

Publication Date

11-13-2017

Abstract

This paper analyses the challenges created by the liability of foreignness and the associated country-of-origin bias and their effect on Western managers’ decisions about whether to leave following their company’s acquisition by an emerging-economy multinational. Using a manipulated scenario-based survey conducted with American, French and German managers, the results show that managers are more likely to resign if their company is acquired by a company from an emerging economy (specifically, China or India) than by a company from their home or another Western, developed country. Furthermore, the results do not support previous research findings that show the role of prior alliance between the acquirer and its target, previous experience with successful acquisitions, previous experience with the local market and minimal post-acquisition integration to be forces helping to counterbalance the adverse effects of the liability of foreignness, country-of-origin bias and the ‘emergingness’ nature of foreign acquirers.

Comments

This article was originally published in Management International Review. The full-text article from the publisher can be found here.

Due to copyright restrictions, this article is not available for free download from ScholarWorks @ CWU.

Journal

Management International Review

Rights

Copyright © 2017, Springer-Verlag GmbH Germany

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