Chinese MNE acquisition of unrelated foreign businesses: The role of diversified business group affiliation, private ownership and strategic asset seeking

Xinwei Shi, Dylan Sutherland, Christopher Williams*, Ke Rong

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


While the acquisition by Chinese firms of unrelated foreign businesses has become quite common, it is a highly risky undertaking not fully explained by international business scholars. Using resource-based and institutional theory, we hypothesize that affiliation with a domestically diversified business group confers pre- and post-acquisition advantages and legitimacy, fostering unrelated foreign acquisitions. In addition, we argue that private ownership as well as a motive to seek strategic assets amplify this tendency among Chinese firms affiliated to diversified groups. Ordered logit modelling for 662 Chinese cross-border M&As over a 10-year period provides support for our hypotheses. Our findings shed new light on: the distinctive characteristics of Chinese MNEs; broader conceptual arguments regarding the strategy of emerging market MNEs; the apparent paradox of why Chinese MNEs have used international acquisitions to diversify at a time when many Western diversified conglomerates are divesting non-core businesses.

Original languageEnglish
Pages (from-to)145-156
Number of pages12
Publication statusPublished - 6 Mar 2021

Bibliographical note

Funding Information:
This research was supported by the International Postdoctoral Exchange Fellowship Program, National Postdoctoral Management Committee, China; the National Natural Science Foundation of China [Grant nos. 71872098; 71834006], and the Major Research Projects of Philosophy and Social Sciences of the Ministry of Education [Grant no. 17JZD018].

Publisher Copyright:
© 2021 Elsevier Inc.


  • Business groups
  • China
  • International diversification
  • Ownership
  • Relatedness
  • Strategic asset seeking (SAS)

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