Two main theories were selected to aid the development of the research con-structs. These are institutional theory (North 1990; Scott 1995; Peng 2003; Diko-va & Van Witteloostuijn 2007) and Internationalization Process Theory (Johan-son & Vahlne 2009). Figure 4 shows the focus of previous IB studies addressing the choice of partial and full acquisition.
Figure 4. Focus of the previous IB studies on Acquisition Strategies and Per-formance
Previous studies have mainly addressed acquisition choice decisions (partial and full acquisition) from different theoretical lenses such as institutional theory, hos-tage theory of joint ventures, real options theory and agency theory. They have approached these studies without taken into cognizance that acquisitions can be a continuum decisions en route to full acquisition, where firms can increase and decrease their equity decisions over time.
The performance of partial and full acquisition has been explored via financial measures (e.g. share price performance, profitability, etc.) without taken into cog-nizance the initial motives of setting up the subsidiary. They neglected for exam-ple that the performance of all subsidiary mandate is not measured by financial profitability (e.g. intra-firm sourcing subsidiaries or R&D subsidiaries).
In the current study, a process theory (Uppsala model) is utilized to capture the acquisition process depicting how the parent firm's interactions with their busi-ness networks leads to different acquisition strategies and changes in the equity stake. This is further integrated with institutional theory to capture the institutions that regulate economic activities and the choice available to managers in decision making (North 1990; Scott 1995; Peng 2003; Dikova & Van Witteloostuijn 2007). Institutional theory also moderates the outcomes of firms’ interaction with
their business networks (Pogrebnyakov & Maitland 2011; Santangelo & Meyer 2011). The two theories explored for this study is integrated with the literature on motives of market entry, host country experience and acquisition performance to discuss the role of motives on acquisition strategies and the actualization of the strategic motives for setting up the subsidiary. Figure 5 shows the focus of the current dissertation.
Figure 5. Focus of the current study
Structurally, this dissertation is a monograph study consisting of seven chapters.
CHAPTER ONE introduces the dissertation and outlines its background. It dis-cusses the forms of acquisition strategies to provide the readers a better under-standing of the scope and motivation of the study. Chapter one also discusses the research problems, research gaps, research objectives, research questions and also the limitations of the study. The chapter concludes with a discussion on expected contributions of the study, key concepts utilized in the study, positioning the dis-sertation within streams of acquisition literature and theoretical paradigms.
CHAPTER TWO discusses the extant literature on acquisition vs. green-fields/alternative entry mode strategies. It also discusses the literature on strategic motives for acquisition and performance of foreign acquisition. Furthermore, this chapter discusses the two theoretical lenses utilized in the study (institutional the-ory and Uppsala internationalization process thethe-ory). The chapter summarizes with clarifications on the choice of two theories explored for the study. It also discusses the boundaries of the theories and how the chosen theories will be used to answer the research questions.
CHAPTER THREE focuses on the development of conceptual constructs. It shows how formal institutional distance (regulatory restrictions, failure in formal institutions and regulatory transparency) influences the choice of partial, staged, and full acquisition at the time of entry. Also, it shows the role of informal
institu-tional distance (negotiation failures rooted in cultural distance) on these choices.
From internationalization process theory, target-specific experience, trust and knowledge opportunities are key constructs explored to show how they influence the choice of partial, staged and full acquisition. This is further integrated with the literature on host country capability a construct rooted in part in internationaliza-tion process theory.
CHAPTER FOUR explored the role of institutions, host country capability in the differential performance returns to partial, staged and full acquisition. It also dis-cusses the motive-based performance measure; and develops a more refined ap-proach to capturing the performance of an acquisition in the foreign market to aid future performance studies in IB field. The chapter concludes with a summary of the conceptual framework for the study highlighting the determinants of tion strategies, changes in equity stake and performance differentials of acquisi-tion strategies.
CHAPTER FIVE focuses on the research strategy and methods. First, it dis-cusses the philosophical assumption of the study. Based on the philosophical as-sumption, case study method was chosen as the right research approach for the study. Second, case study as a research strategy for the current study is discussed.
It also emphasizes the rationale for multiple case studies and its role in theory building. Based on this discussion, a theory building model is established that details the selection of cases, data collection (interview design), data analysis and reporting the collected data. Hence the dissertation uses the critical realism para-digms, quality criteria in conducting research within this paradigm is utilized to evaluate the validity of the study.
CHAPTER SIX discusses the empirical data in terms of the background of the cases. It shows the timing of investment, acquisition strategies (partial/full/staged) per case firms, motives of investment of case firms and location of investments.
Furthermore, within case analysis is done showing the key issues within each case firm acquisition. After that, a cross-case analysis is done to show the key findings of the study. The cross-case analysis is done using the constructs developed in the study. After that, emerging themes are elucidated, generalized and contextualized across cases.
CHAPTER SEVEN starts with discussions on the objective of the study and research questions. The summary of findings of the study is discussed in this sec-tion. Each finding is discussed separately to provide a richer understanding and implications. Next, the key contributions of the dissertation both theoretically and empirically are discussed. Furthermore, this chapter discusses the practical and
managerial significance in management and international business. Finally, di-rection for future studies is discussed.
Figure 6 shows the structure of the dissertation as summarized in the discussions above.
CHAPTER 1 INTRODUCTION
• Background of the Study
• Forms of Acquisition
• Previous Study and Research Gaps
• Research Question and Limitations of the Study
• Expected Contributions of the Study
• Key Concepts
• Positioning of the Study and Structure of Dissertation
CHAPTER 2 THEORITICAL BACKGROUND ON ACQUISITION STRATEGIES
• Literature Review-Acquisition Entry Strategies and Performance
• Strategic Motives Perspective on Foreign Acquisitions
• Institutional Theory
• Internationalization Process Model and Foreign Acquisitions
• Summary of Theoretical Lenses and Theoretical Boundaries
CHAPTER 3 ACQUISITION ENTRY AND CHANGES IN EQUITY STAKE
• The influence of formal and informal Institutions on Acquisition strategies
• The influence of Target-Specific Experience and Host Country Capability on Acquisi-tion strategies
• The Role of Entry Motives and Institutions on Acquisition Strategies
• Determinants of Equity Changes in Acquired Foreign Subsidiaries
CHAPTER 4 DIFFERENTIAL RETURNS TO ACQUISITION STRATEGIES
• The Role of Institutions on Differential Performance of Acquisition Strategies
• The Role of Entry Motives on Differential Performance of Acquisition Strategies
• The Role of Host Country Capability on Differential Performance of Acquisition Strategies
• Summary: Determinants of Acquisition Entry, Post Entry and Acquisition Perfor-mance
CHAPTER 5 RESEARCH STRATEGY AND METHODS
• Philosophical Justification: Realism
• Research Approach
• Case Study Research and Theory Building
• Evaluating and Analyzing Data
• Data Evaluation (Quality Approaches to Realism)
Figure 6. Structure of Dissertation
CHAPTER 6 EMPIRICAL ANALYSIS AND RESULTS
• Empirical Data and Background of Case Firms
• Within Case Analysis
• Determinants of Partial, Staged and Full Acquisition at Market Entry
• Acquisition Entry Strategies: The Role of Acquisition Motives
• Determinants of Equity Changes in Acquired foreign Subsidiaries
• Performance Differentials in Partial and Full Acquisitions
CHAPTER 7 CONCLUSIONS AND DISCUSSIONS
• Summary and Findings
• Theoretical and Empirical Contribution
• Practical and Managerial Significance
• Directions for future study
2 THEORETICAL BACKGROUND ON
ACQUISITION STRATEGIES, MOTIVES, AND PERFORMANCE
The main purpose of this chapter is to discuss in more detail literature on acquisi-tion entry strategies, acquisiacquisi-tion entry motives and acquisiacquisi-tion performance. It provides a better understanding of the scope of previous studies. After the litera-ture review, the subsequent sub-sections discuss the theories utilized for this study, that is, internationalization process theory and institutional theory. The chapter concludes by addressing critiques of the chosen theory, the choice of the theories selected in relation to the research questions and finally, the boundaries of the application of the theories.