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Economic nationalism and foreign acquisition completion: the case of China

Zhang, Jianhong; He, Xinming

Economic nationalism and foreign acquisition completion: the case of China Thumbnail


Jianhong Zhang


Extending institutional theory, we incorporate a neglected but important component of formal institution, economic nationalism, into a model that specifies its effects on cross-border acquisition success. We suggest that economic nationalism has a dynamic nature and sees the interaction between protectionism and liberalism. As such, it exerts both positive and negative effects on foreign investments, contingent on how these investments are perceived as aligned with the national interests as reflected by national security considerations, foreign relations, and growth strategy. Using a data set containing 7275 announced cross-border acquisition deals in China during 1985–2010, the study finds that (1) when an acquisition activity targets essential industries or state-owned enterprises, it is less likely to be completed because of provoked national economic security concerns; and (2) when an acquirer brings technology and/or capital, or/and helps to restructure poorly-performing firms, or/and the acquirer comes from a country with good foreign relations with China, the acquisition is considered as safe and helpful for the country's development, and it is more likely to be completed.


Zhang, J., & He, X. (2014). Economic nationalism and foreign acquisition completion: the case of China. International Business Review, 23(1), 212-227.

Journal Article Type Article
Publication Date Feb 1, 2014
Deposit Date Apr 4, 2013
Publicly Available Date Sep 11, 2013
Journal International Business Review
Print ISSN 0969-5931
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 23
Issue 1
Pages 212-227
Keywords China, Cross-border acquisition, Economic nationalism, Foreign direct investment policy, Institutional theory.
Public URL


Accepted Journal Article (957 Kb)

Copyright Statement
NOTICE: this is the author’s version of a work that was accepted for publication in International business review. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version will subsequently be published in International business review, 23(1), 2014, 10.1016/j.ibusrev.2013.04.002

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