Are Emerging Market Multinationals Milking Their Cross Border Acquisition Targets? A Study of Inbound Japanese and Korean M&As*

International strategic mergers and acquisitions (M&As) by emerging market multinationals (EMMs) are rapidly gaining importance. Whereas multinational firms from developed countries mostly invest abroad to leverage their existing assets, EMMs tend to seek strategic assets when investing in other countries. We examine the effect of M&As on the performance of acquired firms for 88 inbound M&As in Japan and Korea and find that the post-acquisition performance of Japanese and Korean firms being taken over by EMMs is worse when compared with firms being acquired by developed country multinationals. Our findings thus suggest that firms in Japan and Korea are better off being acquired by developed country multinationals than by EMMs.