Acquirer ownership concentration and foreign ownership structure: A study of Brazilian firms

Cai, Yingdan; Gubbi, Sathyajit; van Veen, Kees; van Ees, Hans

Abstract

Weak governance conditions prevailing in emerging and developing economies tend to encourage concentrated over diffused ownership structures in firms. In this paper we investigate whether the ownership structures in the home market are also replicated in the foreign subsidiaries or are subject to other factors. We contend that firms with concentrated ownership structures in emerging economies tend to prefer partial over absolute ownership in the foreign subsidiaries. This preference is more pronounced in investing firms who are affiliated to business groups. An examination of 317 cross-border acquisitions by Brazilian acquiring firms in different host countries suggests that acquirer ownership concentration, business group affiliation as well as the joint effects of the two factors all appear to be correlated with lower equity ownership in the foreign target firm.

• Presentation Conference Type: Conference Paper (unpublished)
• Conference Name: British Academy of Management Conference 2016
• Start Date: Sep 6, 2016
• End Date: Sep 8, 2016
• Acceptance Date: Apr 25, 2016
• Publication Date: Jan 1, 2016
• Deposit Date: Jul 6, 2016
• Publicly Available Date: Sep 13, 2016
• Peer Reviewed: Peer Reviewed
• Keywords: ownership concentration, business group affiliation, entry mode, cross-border M&As, emerging market firm, Brazil
• Public URL: https://uwe-repository.worktribe.com/output/917509
• Publisher URL: https://www.bam.ac.uk/civicrm/event/info?id=3013
• Additional Information: Additional Information : ISBN: 9780954960896; Title of Conference or Conference Proceedings : British Academy of Management 2016 Annual Conference
• Contract Date: Jul 6, 2016