RIEB Workshop "Mergers and Acquisitions and Foreign Direct Investment" (Jointly supported by: Kanematsu Seminar)

Date&Time Tuesday, January 22, 2012, 3:00pm-
Place Seminar Room at RIEB (Kanematsu Memorial Hall 1st Floor)
Intended Audience Faculty, Graduate Students, Undergraduates, and Managers for Technology and Product Development at Manufacturers
Language English
Note Copies of the paper will be available at Office of Promoting Research Collaboration.

3:00pm-3:40pm

Topic Culture Clash in International Merger and Acquisition: A Case Study
Speaker Manami SUZUKI (Faculty of Business Administration, Hosei University)
Discussant Hidehiko NISHIKAWA(Graduate School of Business Administration, Hosei University)
Abstract The purpose of this study is to explore culture clash when a Japanese company is merged with a non-Japanese company. We interviewed a Japanese director who previously worked in a Japanese company that was merged and acquired by a non-Japanese company. For success in international mergers and acquisitions, the current case study suggests the importance of pre-research on target companies and understanding individual national and corporate cultures. The results show that a Japanese company does not necessarily have high cultural adaptive abilities. The present case study suggests the standard for local employment and promotion of international enterprises.

3:40pm-4:20pm

Topic Country of Origin Effects in Cross-Border Acquisitions: An Experimental Study of Employee Reactions in the Target Firm
Speaker Tomoki SEKIGUCHI (Graduate School of Economics, Osaka University)
Abstract When a domestic firm is acquired by a foreign-based MNC, how does the image of the MNC's home country influence employee reactions in the target firm? This question is closely related to the topic of country-of-origin effects in cross-border acquisitions, but it is a relatively unexplored area in international human resource management. In order to fill the research gap, this study utilizes a scenario-based experimental design to investigate how nationality of the acquirer firm affects employee reactions in the target firm such as resistance to change and organizational identification. Implications from the findings and future research directions are discussed.

4:20pm～4:40pm

Break

4:40pm-5:20pm

Topic The International Ownership Strategy of Chinese MNEs: The Role of Economic and Institutional Factors
Speaker Martin HEMMERT (Korea University Business School/RIEB, Kobe University)
Abstract We study the determining factors of the ownership strategies of Chinese multinational enterprises (MNEs) by introducing a framework based on transaction cost theory and institutional theory. Analyzing firm-level data on outward foreign direct investment (OFDI) of Chinese MNEs during 2005-2011, we find that Chinese firms are more likely to take a higher equity share when they are operating in a high-tech industry. Contrary to our expectations, Chinese firms take lower equity shares when investing in geographically proximate countries, suggesting they may have different risk perceptions from developed country MNEs. Chinese firms' international ownership decisions are also influenced by their home- and host-country institutional environments. Our results indicate that a high cultural distance between home and host country induces Chinese firms to take lower equity positions in their OFDI. Furthermore, investing firms' state ownership is related to lower equity investments, suggesting that state-owned firms respond to institutional pressures by their riskaverse home country government. Taken together, our results indicate that the ownership strategies of Chinese MNEs are partially deviating from predictions which are based on existing theories of foreign direct investment.