Finance

Emerging markets

Business

Extant taxon

Evolutionary biology

Biology

Marketing

Economics

Microeconomics

Spillover effect

Monetary economics

Mergers and acquisitions

Academy of Management Proceedings

Although cross-border acquisitions are prevalent, many of these transactions fail to complete. This study contributes to extant research by examining how to enhance this completion via learning vicariously from foreign acquirers in a firm’s home country (inbound foreign acquirers). Drawing upon vicarious learning and knowledge spillover theories, we argue that firms not only learn from their direct experience but from inbound foreign acquirers, which subsequently help increase the completion rate of outbound foreign acquisitions by the former. Our analysis based on 2,768 outbound acquisition deals by firms from 41 emerging economies during 2003-2016 shows that inbound acquisitions conducted by foreign MNEs in an emerging market exert a positive impact on the completion likelihood of outbound acquisitions conducted later by emerging market firms from this country. Moreover, this positive effect is stronger if the industry relatedness between the foreign acquirers and a focal EMNE is higher, or if the institutional distance between the focal EMNE’s home country and its target firm’s country is lower.

Learning from Inbound Foreign Acquirers to Reach Global