Authors: Manli Huang; Mingxia Xu; Jingcheng Shi
Addresses: School of Business Administration, South China University of Technology, Guangzhou, 510640, China. ' School of Business Administration, South China University of Technology, Guangzhou, 510640, China. ' School of Economics, Jinan University, Guangzhou, 510640, China
Abstract: This paper examines the relationship between internationalisation, vertical integration and performance, using a longitudinal case study of a Chinese firm named BOE Technology, an international supplier of display products and solutions. By exploring the international expansion along with its vertical integration through cross-border mergers and acquisitions (M&A), we use time-series data from 1997 to 2008 to capture both the static and dynamic components of the relationship. We found a significant U-shaped curvilinear relationship between internationalisation and innovation and a positive linear relationship between vertical integration and innovation. Results also show an inverted U-shaped curvilinear model and an S-shaped curve model, but not significant, correspondingly in internationalisation-performance (ROS) relationship and vertical integration-performance relationship. The results of this study provide evidence of the importance of vertical integration in international expansion for competitive advantage, but also suggest the complexities to achieve these advantages, especially for emerging market multinational corporations which seek the advantages through cross-border M&A.
Keywords: internationalisation; vertical integration; corporate performance; innovation; BOE Technology; China; mergers and acquisitions; multinational corporations; MNCs; cross-border M&A.
International Journal of Networking and Virtual Organisations, 2012 Vol.10 No.3/4, pp.346 - 360
Published online: 08 Apr 2012 *Full-text access for editors Access for subscribers Purchase this article Comment on this article