Exploring the Impact of Establishment Mode on Intangible Strategic Asset Creation in Chinese MNEs: Springboard Cross-border Strategic Asset Seeking M&As Versus Greenfield R&D Related FDI Projects

Sutherland, Dylan; Anderson, John; Wu, Ludan; Severe, Sean

Abstract

How does greenfield versus M&A FDI establishment mode influence intangible asset creation in the parent companies of Chinese MNEs undertaking overseas knowledge sourcing/strategic-asset-seeking types of FDI? We hypothesise that while springboard type cross-border acquisitions provide opportunities for the rapid addition of locally embedded competence creating foreign subsidiaries, challenges in developing intra- MNE knowledge diffusion channels may frustrate integration and thus retard subsequent growth of parent firms’ intangible assets. Greenfield R&D FDI, by contrast, may initially lack local embeddedness but holds out the potential for superior intra- MNE linkages and thus reverse knowledge diffusion to the MNE parent. Our results, based upon propensity score matching and difference in difference models comparing CMNE parent outcomes for FDI projects over the 2003-2018 period, support this argument. We discuss implications for mainstream international business theorising, including springboard theory, which largely overlooks greenfield establishment mode as a means of rapid firm-level catch-up for emerging market MNEs.

Citation

Sutherland, D., Anderson, J., Wu, L., & Severe, S. (2024). Exploring the Impact of Establishment Mode on Intangible Strategic Asset Creation in Chinese MNEs: Springboard Cross-border Strategic Asset Seeking M&As Versus Greenfield R&D Related FDI Projects. Asian Business and Management, 23, Article 519–543. https://doi.org/10.1057/s41291-024-00265-6

• Journal Article Type: Article
• Acceptance Date: Jun 20, 2023
• Online Publication Date: Apr 25, 2024
• Publication Date: 2024-09
• Deposit Date: Jun 22, 2023
• Publicly Available Date: Apr 26, 2025
• Journal: Asian Business & Management
• Print ISSN: 1472-4782
• Electronic ISSN: 1476-9328
• Publisher: Palgrave Macmillan
• Peer Reviewed: Peer Reviewed
• Volume: 23
• Article Number: 519–543
• DOI: https://doi.org/10.1057/s41291-024-00265-6
• Public URL: https://durham-repository.worktribe.com/output/1169374
• Publisher URL: https://www.palgrave.com/gp/journal/41291