Acquisitions are regarded as a strategy to redeploy a firm's intangible assets, apart from tangible assets. A critical intangible asset to be redeployed in acquisitions is nonmarket capital, particularly in emerging economies. Nonmarket capital, defined as political capital, social capital and reputational capital that increase firm's institutional relatedness, has been viewed as an intangible asset of salient importance in emerging economies, for it can help firms enhance legitimacy, access market information and resources, and reduce uncertainty. And yet, the role of nonmarket capital in corporate acquisitions has been understudied. The main objective of this dissertation is to provide a comprehensive analysis of functions and dimensions of nonmarket capital, and examine how nonmarket capital is related to an emerging economy firm's acquisition strategy and performance. / Drawing from resource-based view and the signaling theory, I posit that substantial nonmarket capital generates value via substantial functions execution and by directly facilitating business transactions, while symbolic nonmarket capital helps signal a firm's underlying attributes and reduce market uncertainties. Accordingly, acquiring firms should leverage their nonmarket capital such that its substantive and symbolic functions can be effectively redeployed in target firms. In this study, I focus on three main target attributes, i.e. state ownership, product relatedness, and listing status that represent the uniqueness of strategic factor markets---political, product, and capital markets---in emerging economies. / Key words: nonmarket capital, acquisitions, China / This dissertation aims to offer several contributions. First, this study enriches the concept of nonmarket capital by theorizing its different functions and dimensions, using the resource-based view and the signaling theory. Second, the study extends the acquisition literature to emerging economies context by highlighting nonmarket capital as a unique intangible asset to be redeployed in acquisitions and effects of nonmarket capital on corporate acquisitions. Finally, the study also offers strategic implications to managers in emerging economies by suggesting how they can leverage (or deploy) their nonmarket capital portfolios in pursuing corporate acquisition strategy. / Using China as the empirical context, data of615 listed firms for 2003-2006 show that: (1) symbolic, instead of substantial, political capital interacts with state-owned targets and is positively related to firm performance; (2) substantial social capital is positively related to product-unrelated targets and such strategy leads to superior firm performance; and (3) symbolic, as opposed to substantial, reputational capital positively affects firm performance in case of unlisted targets. / Zhang, Lingqing. / Advisers: Hang-yue Ngo; Daphne W. Y. Yiu; Kenneth S. K. Law. / Source: Dissertation Abstracts International, Volume: 73-06, Section: A, page: . / Thesis (Ph.D.)--Chinese University of Hong Kong, 2011. / Includes bibliographical references (leaves 186-204). / Electronic reproduction. Hong Kong : Chinese University of Hong Kong, [2012] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Electronic reproduction. [Ann Arbor, MI] : ProQuest Information and Learning, [201-] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Electronic reproduction. Ann Arbor, MI : ProQuest dissertations and theses, [201-] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Abstract also in Chinese.

The thesis focuses on those factors which affect firm growth in the setting of the Chinese transition economy, such as size, age, entrepreneurship, resources, and environment. As regards the complexity of the business expansion mechanism, an interdisciplinary approach combining the fields of economics and management is adopted. Using fieldwork methods, new data were gathered in face-to-face interviews with 83 owner-managers of the Chinese privately owned firms in P. R. China in 2004, as well as in follow-up telephone interviews in 2006. The unique body of qualitative and quantitative data in terms of firm operation, human resources management, finance, technology and innovation, enterprise culture and competitive environment, were collected by a specially designed survey instrument, and enabled a number of new hypotheses to be tested in both economic and managerial aspects. With respect to the modern developments of Gibrat’s Law (1931) and Jovanovic’s Learning Theory (1982) in economics, the effects of two “stylized factors”, namely size and age, along with a vector of firm-specific, environmental and selection bias variables, on firm growth, were examined in Heckman’s (1979) two-step selection model with the correction for sample selection bias and heteroscedasticity. The results indicated that the “stylized facts” that smaller and younger firms grew faster were also valid in the setting of China. This thesis also explored managerial factors contributing to firm growth – viz. entrepreneurship theory, resource-based view in strategic management, and contingency theory in organizational behaviour. A variety of statistical methods were utilized to operationalize entrepreneurial orientation (EO), intangible assets (IA), and contingency factors (e.g. structure, environment, strategy, etc), and econometric models were estimated to examine their relationship with firm dynamics. The evidence suggested that IA might be more capable of facilitating firm growth than EO. However, when both were disaggregated into a lower level of attributes, the influences on growth may vary. Further, contingency theory, originally proposed for the case of larger firms in the west, was also validated in this study on the Chinese sampled firm. The combination of organizational forms and contingency configurations presented a higher power to explain business expansion. It implied that “the good fit” of contingency factors influenced firm dynamics only in a moderate way, whereas “the badness of fit” in configuration could engender either the highest or lowest firm growth, subject to their organizational structures.