Electronic Theses and Dissertations

Identifier

3731

Date

2016

Document Type

Dissertation

Degree Name

Doctor of Philosophy

Major

Business Administration

Concentration

Management

Committee Chair

Benwari L Kedia

Committee Member

Peter Wright

Committee Member

David G Allen

Committee Member

Emin Babakus

Abstract

Multinational enterprises operate in a volatile global environment and face high policy uncertainty and risks. Policy risk is a location-specific factor that has been shown to influence foreign direct investment decisions. However, foreign investors' responses to such risk may be influenced by the quality and strength of home-host country relations. Home-host country relations affect investors' expectations of value capture and control in the host market and as such constitute an important factor affecting cross-border investment. In this dissertation, Iadopt a relational view to provide a more complete understanding of when and how policy risk influences cross-border mergers and acquisitions (M&As)by investigating the role of the macro structure in which nations are embedded. I focus on cross-border acquisitions in emerging economies. In the first part of the dissertation, Iexamine whether host country policy risk influences M&Aactivity in emerging economies. In addition, Iconduct a country-dyad analysis, focusing on pairs of countries, to determine whether the effect of policy risk on cross-border M&As varies based on the properties of home-host country relations, namely, their (1) quality and (2)multiplexity. In the second part of the dissertation, Ifocus on the pre-completion stage of cross-borderM&As and investigate the relationships of deal-specific factors with the likelihood of M&Adeal completion and the duration of the negotiation process under varying levels of host country policy risk and properties of home-host ties. The results of the empirical analysis confirm that policy risk is consistently negatively associated with M&A outcomes at the country, country-dyad, and deal levels. In addition, results show that the effect of policy risk varies based on the quality and strength of home-host country relations. These findings provide corroborating evidence that policy risk is a significant source of uncertainty in host environments with important implications for firms considering cross-border M&As as a form of investment. Furthermore, the findings provide insights into why some firms are less sensitive to the deterring effects of host country policy risk than others.

Comments

Data is provided by the student.

Library Comment

Dissertation or thesis originally submitted to the local University of Memphis Electronic Theses & dissertation (ETD) Repository.

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