Economic Nationalism and Foreign Acquisition Completion : The Case of China

Extending institutional theory, we incorporate a neglected but important construct of institution, economic nationalism, into a model that specifies its influences on cross-border acquisition success. Using a data set containing 7,275 announced cross-border acquisition deals in China during 1985-2010, the study finds empirical support for our model. Specifically, when an acquisition activity targets essential industries or a state-owned enterprise, the acquisition attempt is less likely to be completed because of national economic security concerns; when an acquirer brings technology and/or capital, or/and helps to restructure poorly-performing firms, or/and the acquirer comes from a country with good political relations with China, the acquisition activity is considered as safe and helpful, the acquisition attempt is more likely to be completed