Solving the ally-versus-acquire dilemma through the dual lenses of subjective and objective views

Nowadays many firms seek hard-to-imitate assets via allying with or acquiring other firms that own desired resources. As such, how to choose between alliances and acquisitions becomes a critical decision, and one important determinant is interfirm factors. This study probes three crucial yet underexplored interfirm differences, and develops scales to capture managers’ perceptions of the differences that, based on managerial cognition literature, dictate the ally-versus-acquire choice. Further, we argue that managers adjust their judgement across varying objective conditions. Each perceived difference is thus paired with a moderator identified respectively from the resource-based view, competitive dynamics, and collaborative capability literature. Evidences on Taiwanese firms show that a larger resource-deployment difference enhances acquisition likelihood, while greater differences in marketing praxis and human resource management increase alliance formation. Moreover, the resource-deployment difference leads to alliances for relatively younger partners, and the difference in human resource management favors acquisitions when focal firms have more interfirm governance experience

Hypolipidemic Effects of Three Purgative Decoctions

In traditional Chinese medicine (TCM), purgation is indicated when a person suffers an illness due to the accumulation of evil internal heat. Obese individuals with a large belly, red face, thick and yellow tongue fur, constipation, and avoidance of heat are thought accumulates of evil internal heat, and they are also treated with purgatives such as Ta-Cheng-Chi-Tang (TCCT), Xiao-Chen-Chi-Tang (XCCT), and Tiao-Wei-Chen-Chi-Tang (TWCCT) by TCM doctors. In previous studies, our group found that TCCT has potent anti-inflammatory activity, and that XCCT is an effective antioxidant. Since rhubarb is the principle herb in these three prescriptions, we will first present a thorough review of the literature on the demonstrated effect (or lack of effect) of rhubarb and rhubarb-containing polyherbal preparations on lipid and weight control. We will then continue our research with an investigation of the anti-obesity and lipid-lowering effect of TCCT, XCCT, TWCCT, and rhubarb extracts using two animal models. TWCCT lowered the serum triglyceride concentration as much as fenofibrate in Triton WR-1339-treated mice. Daily supplementation with XCCT and TWCCT significantly attenuated the high-fat-diet-induced hypercholesterolemia in rats. In addition, TWCCT also significantly lowered the high-fat-diet-induced hypertriglycemia. Although feeding high-fat diet rats with these extracts did not cause loose stools or diarrhea or other deleterious effects on renal or hepatic function. None of these extracts lowered the body weight of rats fed on high-fat diet. In conclusion, the results suggest that XCCT and TWCCT might exert beneficial effects in the treatment of hyperlipidemia

Interpartner Differences and Governance Mode Dilemma: The Role of Alliance Scope

It is generally recognized that the governance structure of an alliance, equity versus nonequity, is an important strategic choice. Since an alliance teams up companies that are inevitably divergent in upstream resource endowment and/or downstream market coverage, it is necessary to select an appropriate governance form to manage the interpartner differences and thus facilitate cooperation. Nevertheless, prior studies have suggested conflicting governance modes despite their adherence to the rationale of transaction cost economics. To address this gap in extant literature, the current study takes into account the moderation of alliance scope in the interfirm difference-governance choice linkage. In sum, this paper argues that, to determine a suitable governance structure, there is a need to concurrently examine how different the partnering firms are from each other and what range the collective activities cover. Hierarchical logistic regression analysis was used to test hypotheses in a sample of 125 bilateral alliances. The empirical findings indicate that nonequity modes will be preferred for the alliances that have less interfirm resource disparity and narrower alliance scopes, while equity-based forms will be chosen for the alliances that have less interfirm market divergence and narrower alliance scopes

Interpartner Differences and Governance Mode Dilemma: The Role of Alliance Scope

Abstract It is generally recognized that the governance structure of an alliance, equity versus nonequity, is an important strategic choice. Since an alliance teams up companies that are inevitably divergent in upstream resource endowment and/or downstream market coverage, it is necessary to select an appropriate governance form to manage the interpartner differences and thus facilitate cooperation. Nevertheless, prior studies have suggested conflicting governance modes despite their adherence to the rationale of transaction cost economics. To address this gap in extant literature, the current study takes into account the moderation of alliance scope in the interfirm difference-governance choice linkage. In sum, this paper argues that, to determine a suitable governance structure, there is a need to concurrently examine how different the partnering firms are from each other and what range the collective activities cover. Hierarchical logistic regression analysis was used to test hypotheses in a sample of 125 bilateral alliances. The empirical findings indicate that nonequity modes will be preferred for the alliances that have less interfirm resource disparity and narrower alliance scopes, while equity-based forms will be chosen for the alliances that have less interfirm market divergence and narrower alliance scopes.</div

Do Chinese acquirers paying premiums in large international acquisitions experience negative market reactions as Western counterparts?

Purpose This study draws on behavioral finance and signaling theory to investigate market reactions to Chinese acquirers when they made premium payments in large cross-border acquisitions. Paying high premiums has been considered an inferior acquisition decision that engenders negative market reactions in previous studies examining Western acquirers. Moving beyond previous work, this paper aims to propose that the premiums paid by Chinese firms in large international acquisitions will yield positive market reactions. Design/methodology/approach This paper applies an event study method and tests hypotheses on a sample that comprises large international acquisitions made by Chinese acquirers between 2007 and 2012. Findings The acquisition premium paid by a Chinese acquirer in a large cross-border acquisition positively affects its stock market return to the acquisition announcement. That is, investors rely on the managers’ judgment about the synergistic and value-creating potential of the acquisitions, as inferred from the premiums paid. Moreover, it was found that the relationship between acquisition premiums and stock market returns is moderated by whether the transactions are tender offers, in that the positive relationship is weaker when acquisitions are tender offers. Originality/value Different from previous research focusing on Western companies and proposing a negative linkage between premiums paid and investor reactions to the acquisitions, this study sheds light on Chinese acquirers who paid premiums in large international acquisitions and, based on the logic of behavioral finance and signaling theory, posits a positive association in the context of Chinese acquirers. </jats:sec