The effects of political embeddedness on cross-border mergers and acquisitions: Alibaba's case

Zhi Wang, Gerhard Kling, Jiayi Li* (Corresponding Author)

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)


With its dominant state-owned enterprises (SOEs), peculiar governance system and international ambitions, China offers a unique setting to test theories explaining the role of political embeddedness in management decisions. Cross-border M&As have become an essential tool for Chinese acquirers to internationalise. We examine whether political embeddedness influences firms' propensity for conducting cross-border M&As and their success. Using panel data with 30,314 firm-year observations from 2000 to 2015, we show that non-SOEs conduct more cross-border M&As than SOEs and they benefit more from M&A activities. After summarizing the dilemmas faced by politically embedded enterprises (PEEs), we introduce the successful case of Alibaba acquiring Lazada to explain the quantitative results in detail. Finally, we suggest potential approaches to alleviate institutional barriers for successful cross-border M&As.
Original languageEnglish
Pages (from-to)392-416
Number of pages25
JournalAsia Pacific Business Review
Issue number2
Early online date8 Oct 2022
Publication statusPublished - 15 Mar 2023

Bibliographical note

This paper is supported by the Fundamental Research Funds for the Central Universities at Southwestern University of Finance and Economics [JBK2201036].


  • Alibaba
  • China
  • Cross-border M&A
  • government ownership
  • political connexion
  • political embeddedness


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