Montreal Local Global Research Group and The John Molson School of Business present
Dr. Alvaro Cuervo-Cazurra
Associate Professor of International Business and Strategy
The Robert Morrison Fellow at D’Amore-McKim School of Business,Northeastern University, USA
||Friday, Dececmber 7, 2012
||Morning Session (see below) 9 to 11 a.m.
Presentation 11:30 a.m.
||Concordia University MB Building, Room MB 6.260 (6th floor)
1450 Guy Street (de Maisonneuve Blvd. West), Montreal, Quebec.
Technological Escape and Cross-Border M&As by Developing Country Multinational Companies
We analyze the performance of cross-border mergers and acquisitions (M&A) by developing country multinational companies
(DMNCs) in comparison to those of advanced economy multinational companies (AMNCs). We introduce the technological escape hypothesis, in which we propose that DMNCs address the weak innovation systems of their home countries by escaping to advanced economies and acquiring high intellectual property (HIP) target firms. Specifically, we argue that DMNC acquirers perform relatively worse than AMNC acquirers when purchasing target firms in advanced economies because of their lower ability to operate in the institutional environment there. However, we propose that DMNC acquirers perform relatively better when purchasing HIP target firms in advanced economies because they obtain sophisticated technologies that help them upgrade their home operations and solve their technological comparative disadvantages. Additionally, we argue that target firms acquired by DMNCs in advanced economies perform relatively worse than target firms acquired by AMNCs because the former receive less sophisticated competitive capabilities from the acquiring firm. Moreover, HIP target firms in advanced economies acquired by DMNCs experience even lower relative performance than those acquired by AMNCs because DMNC acquirers are more likely to hollow them out of their advanced technologies than AMNCs. The results of the empirical test support the technological escape hypothesis but not the hollowing out hypothesis.
Alvaro Cuervo-Cazurra is Associate Professor of International Business and Strategy and the Robert Morrison Fellow at Northeastern University’ D’Amore-McKim School of Business. Before joining Northeastern he was a faculty member at the University of South Carolina and at the University of Minnesota, and visiting professor at Cornell University. Alvaro studies the internationalization of firms, with a special interest in developing-country multinationals. He also analyzes governance issues, with a special interest in corruption in international business. His research appears in leading academic journals, such as Academy of Management Journal, Journal of International Business Studies, Strategic Management Journal, and Research Policy, and in several edited books. He is the reviewing editor of Journal of International Business Studies and serves
on the editorial boards of other leading journals, such as Strategic Management Journal, Global Strategy Journal, organization Studies, and Journal of World Business. His geographical area of expertise is Latin America. He has done fieldwork in Argentina, Brazil, Chile, Costa Rica, Guatemala, Nicaragua, Mexico, Spain, and the US. Alvaro teaches courses on global strategy and sustainability at the undergraduate, masters, executive and PhD levels. He received a PhD from the Massachusetts Institute of Technology and another from the University of Salamanca.
Informal Morning Session
On the morning of December 7th, Dr. Cuervo-Cazurra will also meet informally with interested MSc and PhD students from all universities. This session will be held in room MB 13.202, 1450 Guy Street (corner of de Maisonneuve Blvd. West) from 9:30 to 11:00 a.m. Coffee will be served. Please RSVP to Abdulrahman Chikhouni at
to assist in planning for this morning session.Please direct any questions concerning these events to:Professor Mehdi Farashahi
Download the event poster (PDF)