Syudy On The Influence Of Political Negative Reports On The Success Or Failure Of Emerging Market Enterprises’ Cross-Border Mergers And Acquisitions

With the continuous acceleration of economic globalization,more and more emerging market enterprises(EMNs)choose cross-border mergers and acquisitions(CBAs)as an important way to integrate into internationalization,especially through the merger and acquisition of enterprises in developed countries.In this way,they can obtain key strategic resources and quickly enter the local market,which is impossible for foreign direct investment such as greenfield investment.However,due to the imperfect market mechanism and laws and regulations in the home country,EMNs often face the liability of origin in overseas M&A,which makes it difficult for them to achieve high-quality overseas M&A.Based on this,from the perspective of political negative reports on emerging market countries by mainstream media of host countries,this study explores the formation mechanism of the liability of origin and its impact on the success or failure of M&A.On this basis,several moderating variables including geographical distance,related M&A,listed M&A companies and CBAs’ experience are added.The situational constraints on the role of the liability of origin are studied at the national,industrial and firm levels.Firstly,this paper defines the concepts involved in this paper through normative research,sorts out relevant theories,and conducts a literature review on the CBAs of EMNs,the liability of origin,media reports and overseas mergers and acquisitions.Secondly,this paper combines the theory of journalism and communication with organizational identity theory to proposes the research hypothesis.Finally,the acquisition data of EMNs in the United States from 2016 to June 2021 were selected from Zephyr database.Logit model was established.Regression analysis was carried out using Stata measurement software,and the research results of this paper were obtained.The research found that:(1)political negative reports make the stakeholders of host countries have negative perception on the national image of emerging market countries,which forms the liability of origin.Thus leading to the "stigmatization" of corporate nationality and reducing the success rate of overseas M&A of emerging market enterprises.(2)The increase of geographical distance leads to information asymmetry,which enhances the negative influence of political negative reports on the success rate of CBAs by emerging market enterprises.(3)Related acquisitions will enhance the negative effect of political negative reports on the success rate of CBAs by emerging market enterprises.(4)As a listed company,the acquirer will intensify the negative influence of political negative reports on the success rate of CBAs.In the meanwhile the successful cross-border M&A experience of the acquirer will also significantly enhance the negative effect of political negative reports on the success rate of CBAs.The theoretical contributions of this study are as follows: first,it further develops and deepens the liability of origin,and has a deeper understanding of its formation mechanism and situational constraints.Second,it complements and enriches the theory of CBAs and enhances our understanding of the relationship between media coverage and the success or failure of overseas M&A by emerging market companies.Third,it expands the institutional theory.This paper starts from the "soft" system of national image,and explores its influence on the success or failure of CBAs.The practical implications of this study are as follows: firstly,EMNs should take active measures such as disclosing social responsibility reports,highlighting their uniqueness and comprehensibility,seeking strategic alliances with enterprises in host countries,etc.,to encourage stakeholders in host countries to distinguish the corporate image from the image of the home country,convey a positive corporate identity image,and cope with the liability of origin.Secondly,this study adds four moderating variables from the level of country,industry and enterprise,namely geographical distance,related M&A,listed M&A companies and successful cross-border M&A experience.According to the research results,some enlightenment can be provided on how to weaken the liability of origin and improve the success rate of overseas M&A.For example,in view of the geographical distance at the level of country,we can give play to the role of our journalists in the host country to make a timely voice,and we can also hire local M&A advisers.Finally,the domestic government should strive to promote bilateral high-level visits,encourage relevant industry associations to conduct quantitative analysis of the reported data,and at the same time,build a positive national image in the international community and create a good external environment for enterprises to cope with the impact of negative reports.