International high-tech cross-border acquisitions and long-term employment growth in foreign target firms: Are EMNEs catching up by hiring in foreign technological clusters?

Do emerging market (E)MNEs, compared with developed market (D)MNEs, engage in more post-acquisition hiring when acquiring foreign high-tech firms? Drawing on the concepts of ‘home base augmentation’ and ‘catching up by hiring’ and extending them to high-tech cross-border M&As, we argue that EMNEs use post-acquisition hiring to access knowledge and embed themselves in world leading innovation networks to build innovation related dynamic capabilities. Using a large, matched sample of cross-border acquisitions, we find that EMNE acquisitions are associated with significantly higher post-acquisition employment growth than DMNE acquisitions. This effect is especially strong when targets are located in developed market technological clusters. These findings suggest that employment growth is not merely a by-product of acquisition, but a deliberate strategy through which EMNEs develop technological capabilities.