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The effects of ownership identity on corporate diversification strategy of Chinese companies in foreign markets

Lookup NU author(s): Dr Rekha Nicholson

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This is the authors' accepted manuscript of an article that has been published in its final definitive form by Springer, 2020.

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Abstract

In this paper, we examine the impact of acquirer’s ownership identity on corporate diversification decisions of Chinese companies in their cross-border acquisitions. Few studies to date have looked at the effect of ownership on corporate decisions to diversify abroad, particularly in the emerging market context. We find that certain characteristics of acquirer’s ownership identity such as the government ownership, business group membership and beingpublicly traded will be negatively linked with industry diversification in international markets. Also, the effects of ownership identities are contingent upon the host country selection, and acquisitions into developed host countries are likely to be in unrelated industries. We observe that Chinese companies that buy in developed markets engage in global consolidation. These results support our arguments on domestic market protection strategies adopted by the Chinese companies for mitigating competition from their developed market rivals.

Publication metadata

Author(s): Rao-Nicholson R, Cai C

Publication type: Article

Publication status: Published

Journal: Asia Pacific Journal of Management

Year: 2020

Volume: 37

Pages: 91-126

Print publication date: 01/03/2020

Online publication date: 08/06/2018

Acceptance date: 02/03/2018

Date deposited: 05/03/2018

ISSN (print): 0217-4561

ISSN (electronic): 1572-9958

Publisher: Springer

URL: https://doi.org/10.1007/s10490-018-9578-8

DOI: 10.1007/s10490-018-9578-8

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