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Journal of Applied Sciences

Year: 2013 | Volume: 13 | Issue: 20 | Page No.: 4138-4142
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Research Article

Control and Ownership Tradeoff in Resource Sourcing Cross-border M and A of Chinese Enterprises Based on the Bargaining Power, Institution and Institution Imprint

Yongcong Huang
School of Business Administration, South China University of Technology, 381 Wushan Road, Tianhe, Guangzhou, China
Manli Huang
School of Business Administration, South China University of Technology, 381 Wushan Road, Tianhe, Guangzhou, China
Xiaomei Chen
School of Business Administration, South China University of Technology, 381 Wushan Road, Tianhe, Guangzhou, China

ABSTRACT

More and more Chinese resource companies, such as CNPC, have achieved the foreign countries’ resource through cross-border M and A. However they found that the resource sourcing cross-border M and A processes was not easy, because nature resource is the most important for the any host countries’ sustain development and safety. From reviewing previous literatures, we found that control, not the ownership, is the critical determinant in cross-border M and A. Control means achieving the strategic goal and the ownership just means the cost. The most of previous literature about strategic decision of the control and ownership tradeoff assumed that the decision maker is rational, but more and more research found that the decision maker is influenced by their history which means that the they are irrational. Drawing on bargaining power, intuition intuitional imprint, this study tried to combine the rational and irrational variables which would give the whole picture of how to make the strategic decision and proposes a model of control for Chinese enterprises’ Resource Sourcing cross-border M and A.
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