Chinese MNE acquisition of unrelated foreign businesses: The role of diversified business group affiliation, private ownership and strategic asset seeking

While the acquisition by Chinese firms of unrelated foreign businesses has become quite common, it is a highly risky undertaking not fully explained international business scholars. Using resource-based and institutional theory, we hypothesize that affiliation with domestically diversified group confers pre- post-acquisition advantages legitimacy, fostering acquisitions. In addition, argue private ownership as well motive to seek strategic assets amplify this tendency among affiliated groups. Ordered logit modelling for 662 cross-border M&As over 10-year period provides support our hypotheses. Our findings shed new light on: distinctive characteristics MNEs; broader conceptual arguments regarding strategy emerging market apparent paradox why MNEs have used acquisitions diversify at time when many Western conglomerates are divesting non-core businesses.