How do Digital Multinational Enterprises Choose the Degree of Equity Ownership in Cross-Border Acquisitions? The Resource-Based View and Organizational Learning Strategies Perspectives

This study examined how digital multinational enterprises (MNEs) make strategic decisions on their degree of equity ownership (DEO) in cross-border acquisitions (CBAs) from the resource-based view and organizational learning strategies perspectives. By considering business model types to distinguish between different digital MNEs, we propose that the relevance of digital business models to the DEO in CBAs of digital MNEs may differ. Using data on 664 digital MNEs' (from the United States, China, and India) CBAs between 2010 and 2018 obtained from the Securities Data Company Platinum database, this study found that digital MNEs with pure digital business models involving a high level of technological proprietary know-how preferred full ownership to partial ownership. MNEs with a digital business model involving high Internet intensity in marketing and sales, a market-seeking strategy, and the exploitation of existing resources and capabilities preferred full acquisition. MNEs with a digital business model involving high Internet intensity in production and operations, a strategic asset-seeking strategy, and the exploration of new resources and capabilities preferred partial acquisition. These findings contribute to theory and practice related to the management of digital MNEs.