Cross-Border Acquisition Speed of EMNEs: Towards Validation and Extension of Springboard Perspective

According to the springboard perspective emerging market multinationals (EMNEs) engage in rapid internationalization to acquire strategic assets but implies that such rapidity can continue over an indefinite time-period. In this study, we test the suggestion drawing on organizational learning theory and examining speed of cross-border acquisitions (CBAs) undertaken by EMNEs. Our empirical modelling on a large sample of Indian EMNEs demonstrates that speed of CBA first increases and then gradually decreases as EMNEs conduct CBAs across different global clusters and increase their aggregate CBA number. The curvilinear (inverted U-shaped) relationship between CBA speed and the (a) number of global clusters and the (b) aggregate number of conducted CBAs, validates the ‘aggressive internationalization’ postulation of the springboard perspective, but negates its ‘indefinite continuance’ implication. Managers need to realize that in their quest for acquiring strategic assets in the advanced economies they will not be able to sustain CBA speed of their firms indefinitely. While advantages of learning will enable CBA speed to initially increase, various complexities associated with management of learning across the conducted CBAs will cause speed to gradually decline.