Maturing born globals : long-term, independent survival through the use of mergers and aquisitions
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During the past twenty years an increasing amount of research has been dedicated to the investigation of young, innovative and entrepreneurial companies that are characterized by their early internationalization. While previous studies have concentrated on what enable the existence of these so called ‘born globals’ and the attributes that describe them, little effort has been devoted towards exploring what happen as they mature. Thus, by investigating technology--‐based born globals originating from Israel, this thesis aims to broaden the knowledge about maturing born globals, and what strategies these companies can use if the aim is to survive independently over time. By employing a quantitative approach and longitudinal measures, the study reveals that born globals can benefit from employing mergers and acquisitions strategy. Number of performed acquisitions is positively correlated with probability of survival, and with financial performance in terms of growth in sales, gross profit and shareholders’ equity. Furthermore, findings show that acquiring in order to extend or enhance the company’s product line is the strategy that leads to the highest percentage of surviving companies. The study also includes an investigation of the effect of mergers and acquisitions on the born global’s core activities (i.e. R&D and marketing), where findings indicate a relationship between the strategic reason for acquiring and investment in R&D and marketing. Based on these findings, technology‐based born globals aiming for long‐term independent survival are advised to acquire other companies in order to access readily available products, technologies and capabilities. The acquisition strategy should be rather aggressive, as higher numbers of mergers and acquisitions are related to both higher numbers of survival, and better financial performance.
Masteroppgave i økonomi og administrasjon – Universitetet i Agder 2014