Akademik Veri Yönetim Sistemi
STR Paper Development Workshop (PDW) for Turkey, 2021, İstanbul, Türkiye, 25 - 26 Haziran 2021
The purpose of the study is to examine the performance difference after
cross-border acquisitions made by Turkish business group affiliated firms
throughout their lives. Thirty-six investments were gone through for the
acquirer firms and their sister affiliate firms in six business groups with an
event study approach. Return on assets, return on equity, net profit margin,
gross profit margin, the ratio of price to earnings, and the ratio of market
value to book value are used to observe profitability and market performance.
All analyses applied for seven years, matching three years before and after the
event one by one. To examine the differences in each serial, Paired Group
T-Test was applied. But, when the series does not have a normal distribution,
data analyzed with the Wilcoxon Signed Ranks Test, the non-parametric
alternative of the Paired Group T-Test. Results of 288 observations show that
acquisitions made by Turkish business groups affect neither acquirer nor sister
affiliates positively. The similarly significant findings in the event windows
of the acquirer firm and sister affiliates show that a cross-border acquisition
can affect other sister companies affiliated to the holding as much as the
acquirer. Details of the research design are as follows.
It is easier for developing countries or countries not produce
strategically important technological knowledge at home to obtain this
information externally through cross-border acquisitions. The maturity of the
institutions of the developing countries is behind when compared to the
developed economies. This underdevelopment of knowledge production causes a
costly, risky, and time-consuming structure for companies from these countries.
The tendency to seek and find technological knowledge externally arrives as a
tool to eliminate the existing constraint. Multinational companies from
developing countries turn towards cross-border acquisitions to obtain strategic
knowledge, especially from developed countries. They also intend to improve
their technological and innovative skills by using acquired knowledge in the
local market (Buckley,
Munjal, Enderwick, & Forsans, 2016; Deng, 2009; Fu, Sun, & Ghauri,
2018; Liu, Ghauri, & Sinkovics, 2010; Luo & Tung, 2007; Meyer, Wright,
& Pruthi, 2009; Rui & Yip, 2008; Wang, Senaratne, & Rafiq, 2015).
Many studies in the field show that
cross-border acquisitions, together with other investment types, are made for
being successful (Alhanhanah et
al., 2019; Gaffney, Kedia, & Clampit, 2013; Kedia, Gaffney, & Clampit,
2012). Including growth strategy and
synergy (Aureli,
Ciambotti, & Dragoni, 2016; Brush, 2016; İlhan, 2017), developing new products or
processes (Carvalho &
Ogasavara, 2016; Chen & Liu, 2015; Jayanthi, Sivakumar, & Haldar, 2016;
Pradhan, 2008; Thanos & Papadakis, 2012) are some other specific reasons for
making cross-border acquisitions. The research questions arise from the point
that if any of the acquisitions are made not for only the purpose of making an
acquisition, and if a cross-border investment is riskier than domestic
investments, does it worth making a cross-border acquisition? Furthermore,
seeing acquisitions as knowledge hubs and assumpting knowledge sharing and
transferring, do business group sister affiliates’ performances arise after
cross border acquisitions?
In the Turkish context, cross-border
acquisition as a phenomenon is an understudied issue. Many studies investigate
inward acquisitions (Akdoğu, 2012;
Genc & Kalkan, 2019; Geyikdaǧi & Karaman, 2013; Yildirim, 2017) or acquisitions between Turkish
firms (Alhanhanah,
Akbalik, & Akosile, 2019; Genç & Kalkan, 2020). But there is no comprehensive
study that focuses on outward acquisitions and their performance effects on the
acquirer or sister affiliates. In a context where the business groups are under
a family’s control in formal and informal ties (Karaevli & Yurtoglu, 2018),
studying the performance effects of acquisitions on sister affiliates will
contribute to the literature.
Keywords: Cross-border acquisitions,
business groups, sister affiliate, firm performance, EMNEs.