The Seller's Perspective on Determinants of Acquisition Likelihood: Insights from China's Beer Industry

26 Pages Posted: 21 May 2013

See all articles by Yuping Zeng

Yuping Zeng

Southern Illinois University at Edwardsville

Thomas Douglas

Southern Illinois University at Edwardsville

Changqi Wu

Hong Kong University of Science & Technology (HKUST) - Department of Economics

Date Written: June 2013

Abstract

This study investigates acquisition antecedents during China's transition from a planned to a market‐based economic system. Because of contextual realities such as a lack of freely tradable targets for buyers, the seller's willingness to sell is critical for acquisition occurrence in transition economies. We therefore take the seller's perspective and examine factors underlying firms' willingness to sell. We posit that selling is a decision based on the evaluation of a firm's prospects determined by its embeddedness within the planned system, organizational changes it undertook during the transition, and its ability to adjust its strategy according to the evolving strengths of the planning and marketing institutions. Data from the Chinese beer industry from 1995 to 2004 show that acquisition likelihood is high for firms founded as SOEs, low for firms having attracted more private investment or undertaken multiple changes, and has a U‐shaped relationship with firms' relative investment in marketing resources.

Keywords: acquisition, China, competitive resources, institutional embeddedness, institutional transitions, organizational change

Suggested Citation

Zeng, Yuping and Douglas, Thomas and Wu, Changqi, The Seller's Perspective on Determinants of Acquisition Likelihood: Insights from China's Beer Industry (June 2013). Journal of Management Studies, Vol. 50, Issue 4, pp. 673-698, 2013, Available at SSRN: https://ssrn.com/abstract=2267681 or http://dx.doi.org/10.1111/joms.12020

Yuping Zeng

Southern Illinois University at Edwardsville ( email )

1 Hairpin Drive
Edwardsville, IL 62026-1102
United States

Thomas Douglas

Southern Illinois University at Edwardsville

1 Hairpin Drive
Edwardsville, IL 62026-1102
United States

Changqi Wu

Hong Kong University of Science & Technology (HKUST) - Department of Economics ( email )

Clear Water Bay
Kowloon, Hong Kong
China

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