Ownership share in cross-border acquisitions: does high-tech status of the target matter?

Purpose The purpose of this study is to investigate the influence of the target firm’s high-tech status on the share of ownership decision in cross-border acquisitions (CBAs), which is an under-explored topic in cross-border M&A literature. Design/methodology/approach The authors used Tobit regression and tested the hypotheses using a sample of 7,011 CBA transactions between 1999 and 2014. Inverse Mills ratio was used to address selection bias, and various robustness tests were performed. Findings The authors found that acquirers seek greater ownership share when acquiring high-tech firms, and that this relationship is moderated by various firm and national level factors. Specifically, the positive relationship between the high-tech status of a target firm and ownership share acquired is stronger when the firms’ primary operations are highly related or there is high formal institutional distance between the firms’ home countries, but it is weaker when acquirers have more prior M&A experience or there is high cultural and geographic distance between the firms’ home countries. Originality/value While the topic of ownership strategy in CBAs is advancing, it is still limited, especially when examining acquisitions of high-tech target firms. The authors contribute to the research on CBAs and ownership strategy by focusing on the high-tech status of the target firm, and using a sample of both private and public target firms from 116 countries.