Ownership strategies in knowledge-intensive cross-border acquisitions: Comparing Chinese and Indian MNEs

Drawing on the comparative ownership framework, we perform a comparative analysis of Chinese and Indian multinational enterprises (MNEs)' ownership strategies in knowledge-intensive cross-border acquisitions (CBAs). Specifically, we claim that due to their lower comparative ownership advantage, and the consequent higher information asymmetry, Chinese MNEs are more cautious (than Indian MNEs) in their ownership strategy. We rely on a dataset of acquisitions undertaken by high and medium-high tech Chinese and Indian MNEs worldwide during the period 2000-2014. Results confirm that Chinese MNEs prefer lower equity control than their Indian counterparts. However, such a preference for lower equity decreases with higher home-host institutional distance and host country-specific previous experience. These factors do not seem to modify the ownership preference of Indian MNEs in the same way.