Explaining emerging-market firms' acquisitions of developed-market firms: A resource based perspective

Background: The recent rise of emerging-market companies' (EMCs) acquisitions of developed-market companies (DMCs) has triggered a debate on the appropriateness of the traditional internationalization paradigm (i.e., OLI framework or internalization theory) in explaining these contemporary developments. Scope and approach: We seek to help reconcile the views, by suggesting that assumptions of the existing paradigm must be adapted for the new phenomenon as the latter exhibits features inconsistent with the former's premises. We do so by offering a resource-based perspective that provides a more balanced focus on the role of both firm-specific and location-specific resources in the value creation of EMCs' acquisitions of DMCs. Key Findings and Conclusions: Applying our conditional approach, we develop and test our propositions on the distinct antecedents, processes, and outcomes of such acquisitions as a point of departure for future work.