AIB 2012 Conference Proceedings - Academy of International ...

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of the EMNE's internationalization as the EMNE firm generally lacks firm specific ownership advantages (FSAs).
In this respect, the extent literature has not addressed a gap that if the EMNE lacks FSAs and internationalize to
augment assets, then what factors enables the EMNE to internationalise to augment assets. While examining
asset augmentation activities of the EMNE undertaken through cross border merger and acquisitions, we find
that the EMNE having absorptive capacity and financial capability internationalize to procure technological
assets through acquisitions. (For more information, please contact: Surender Munjal, University of Leeds and
University of Delhi, United Kingdom: smu@lubs.leeds.ac.uk)
Which Factors Determine the Acquisition Price of Cross-border Acquisitions: Do Emerging Market Multinationals
Pay More for their Targets in Advanced Economies
Dieter Somers, Katholieke Universiteit Leuven
Filip De Beule, KU Leuven
This paper examines which factors have an impact on the acquisition price and investigates whether emerging
market multinationals pay on average more for their takeovers in advanced economies than their counterparts
from developed markets. This study also contributes to the literature by analyzing whether emerging market
multinationals pay more for vertically related target firms or target firms that are active in high-tech industries.
After a linear regression with robust standard errors, we obtain surprising results. The empirical analysis
confirms that emerging market multinationals pay more for their targets in advanced economies. Our analysis
however also shows that emerging market multinationals are paying a lower acquisition price when their targets
are vertically related or are active in high-tech industries. These last two findings contradict our hypotheses.
(For more information, please contact: Dieter Somers, Katholieke Universiteit Leuven, Belgium:
dieter.somers@econ.kuleuven.be)
Sequential Internationalization, Heterogeneous Process and Subsidiary Roles: The Case of Hyundai Motor
Company
Chung-Sok Suh, University of New South Wales
Yue Wang, University of New South Wales
Myung Hyun Nahm, Hannam University
This paper proposes a new two-phase conceptualization of firm internationalization, combining routes to foreign
production as the first phase and subsidiary development as the second phase. Focusing on modeling the
second phase, we theorize alternative routes of subsidiary development and establish conceptual links between
firm internationalization and subsidiary roles in relation to patterns of knowledge flows. The model is
illustrated through a comprehensive analysis of a concrete empirical case. We demonstrate that the overall
internationalization process of Hyundai Motor Company (HMC), especially the company's accelerated
engagement in foreign production since the 1990s, shows both a sequential pattern from the headquarters'
perspective and heterogeneous development at the subsidiary level. At the headquarters, the rationale of
capability-building through sequential investment links the company's strategies toward its overseas
subsidiaries. Learning from its initial entry failure, HMC adapted its investment strategy to build production
subsidiaries in countries where the company enjoyed firm-specific advantages (FSA) over local competitors and
faced a low degree of liability of foreignness (LOF) before moving further into markets where HMC faced less
FSA and a higher degree of LOF. At the subsidiary level, however, the HMC experience shows a
heterogeneous development of overseas subsidiaries, which led to individual subsidiaries playing different roles
and shaping the knowledge-flow patterns within the company's global operations. (For more information, please
contact: Chung-Sok Suh, University of New South Wales, Australia: c.suh@unsw.edu.au)
AIB 2012 Conference Proceedings
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