Business Group Affiliation and Location of Indian Firms' Foreign Acquisitions

This study examines the determinants of host-location of cross-border acquisitions by Indian Business Group (BG)-affiliates and other firms during 2000-2008. Our empirical estimates indicate the general attraction of host country market-size and double-taxation-avoidance treaty. However, unlike the standalone firms, the acquisition-location of BG-affiliates is favorably influenced by the host growth rate and bilateral investment treaty, apparently drawn to distant nations, and not significantly affected by the cultural proximity. The host's share of home exports affects relatively more the acquisition-location of standalone firms. Thus the derived resources/parental networks of BG-affiliated emerging market multinational enterprises influence their outward-FDI locational pattern