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Locational Determinants of Overseas Acquisitions: Evidence from Indian Pharmaceutical Industry


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Category
Articles
Publisher
The Empirical Economic Letters
Publishing Date
01-Apr-2014
volume
13
Issue
4
Pages
467-476

This study attempts to identify the most important locational determinants of the host countries which determine the investment destinations of IPCs. The variables under study measure the macro environment such as the prevalence of favorable economic, political, institutional and cultural environments in the host countries. These macro environment proxies may become attractive pull factors for firms to locate their economic activities abroad. The study estimates the model using panel data regression for thirteen annual observations from 2000-12 and finds that strategic resource-seeking motivations are the most important locational determinant of Indian pharmaceutical acquisitions. Interestingly, we find Indian Pharmaceutical Companies to be resilient to the weak institutional environment.