Extending property rights theory, this article conceptualizes an emerging-economy multinational (emerging multinational or EMNE) as a collection of assets over which the EMNE has residual control, gained predominantly through cross-border acquisitions. Two intertwined puzzles emerge: (1) Why do EMNEs often bid higher for targets in developed economies? (2) Why do EMNEs tend to allow such targets significant autonomy? As two sides of the same coin, the two puzzles beg the question of whether an integrative answer exists. Leveraging property rights theory, complemented by a legitimacy-based view, we propose that an answer may lie in EMNEs’ efforts to simultaneously maximize joint value creation, minimize target incentive loss, and overcome legitimacy deficits.
