Three Essays on Organic and Inorganic Growth in Internationalized Markets

Kevin Chastagner

This dissertation investigates internationalized markets through three essays. The first essay examines the relationship between national inward FDI and firm level innovation, and specifically what firm and environmental conditions promote the spillover effect of FDI on firm innovation. Based on the knowledge-based view this paper tests the ability of information to enter the firm from the national environment. From almost 12,000 firms residing in 32 different nations results show that FDI does have a positive relationship with firm level innovation and that both firm and national level characteristics play a role in the transfer of resources into the firm. The second essay looks at firms from emerging markets acquiring firms from the nation of their cross listing, the US. Based on the tenets of the knowledge-based view, we expect that firms who are able to focus on the acquisition of the developed nation firm will be able to integrate the resources they gain access to. In this way we test how the firms industry influences its ability to leverage its diversified knowledge in reaping post-acquisition performance gains. Our tests show that industry competition negatively influences this relationship while industry munificence positively influences this relationship. We also show the best-case situation to be when firms have a diversified knowledge base, are in a low competition industry, and have high resource munificence in their industry. Finally, the third essay looks at the role of knowledge breadth in post-acquisition performance. Building on the knowledge-based view we test the hypothesis that the focal firm's knowledge breadth has an inverse-U shaped relationship with post-acquisition performance. We also test how the firm's industry uncertainty and the nation's cultural distance influence this relationship. We do these tests on both market measures and internal growth measures of performance. Using 1,209 acquisitions with targets from 40 different nations we find differing results between the external and internal market growth measures and significant cross-level interactions.

Three Essays on Organic and Inorganic Growth in Internationalized Markets

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