Question 3. A project examines the quality of institutions and their impact on firms’ strategies. The study distinguishe

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Question 3. A project examines the quality of institutions and
their impact on firms’ strategies. The study distinguishes two
dimensions of institutional inefficiencies in a host country –
generalised and arbitrary – and explores their impact on the
acquirers’ ownership decisions in cross-border acquisitions (CBAs).
The institutional inefficiencies are defined as the problems in an
institutional environment that make it less effective. Generalised
institutional inefficiencies are the explicit problems in the rules
of the game, which make the environment more difficult for all
firms to operate. And arbitrary institutional inefficiencies are
the problems in the application of the rules of the game,
arbitrarily privileging, or hindering firms. Six hypotheses are
developed: Hypothesis 1. The higher the degree of generalised
institutional inefficiencies in a host country, the smaller the
ownership acquired in CBAs. Hypothesis 2. The higher the degree of
arbitrary institutional inefficiencies in a host country, the
higher the ownership acquired in CBAs. Hypothesis 3a. The acquirer
MNEs’ CBA experience in the host region weakens the negative
relationship between generalised institutional inefficiencies in a
host country and the ownership acquired in CBAs. Hypothesis 3b. The
acquirer MNEs’ CBA experience in the host region strengthens the
positive relationship between arbitrary institutional
inefficiencies in a host country and the ownership acquired in
CBAs. Hypothesis 4a. For high-tech MNEs (in comparison to low-tech
MNEs), the negative relationship between generalised institutional
inefficiencies in a host country and the ownership acquired in CBAs
is weakened. Hypothesis 4b. For high-tech MNEs (in comparison to
low-tech MNEs), the positive relationship between arbitrary
institutional inefficiencies in a host country and the ownership
acquired in CBAs is strengthened. The hypotheses were tested using
a sample of 5522 CBAs by firms entering emerging economies. The
results are reported in Table 3.1. The variables involved in the
analysis include:  Ownership acquired in CBAs, measured by the
percentage – ranging from 10% to 100% - of the equity acquired in
the target firm;  Generalised institutional inefficiencies,
measured by the mean value of the firms’ perceived institutional
inefficiencies, including tax administration, corruption, political
instability, business licensing and permit, and access to finance,
in that country and in that year; Page 6 of 12 Turn the page over
Module Code: LUBS5901M01 Table 3.1 Regression results Model 1 Model
2 Model 3 Model 4 Est. p Est. p Est. p Est. p Constant 18.937 .000
19.497 .000 19.830 (1.413) (1.203) (1.218) .000 .000 .000 .000
18.535 .000 (1.501) -0.589 .004 (0.205) -0.011 .000 (0.002) 3.126
.000 (0.763) 2.965 .000 (0.601) -0.365 .000 (0.041) 5.689 .000
(0.689) 0.209 .001 (0.039) 1.123 .103 (0.867) Transaction value
Acquirer assets Cultural distance General inst. Inefficiencies
Arbitrary inst. Inefficiencies Acquirer CBA experience Acquirer
high-tech Generalised inst. Inefficiencies * Acquirer CBA
experience Arbitrary inst. Inefficiencies * Acquirer CBA experience
Generalised inst. Inefficiencies * Acquirer high-tech Arbitrary
inst. Inefficiencies * Acquirer high-tech -0.701 .001 -0.744 .000
-0.732 (0.028) (0.207) (0.207) -0.013 .000 -0.013 .000 -0.013
(0.002) (0.002) (0.002) 3.185 .000 3.290 .000 3.317 (0.765) (0.679)
(0.678) -1.761 .009 (0.679) -1.310 .058 (0.691) -0.302 .000 (0.041)
5.863 .000 (0.903) 0.073 .047 (0.027) -2.286 .000 (0.043) 2.840
.000 (0.603) Note. Dependent variable is ownership acquired, as a
percentage. Standard errors Page 7 of 12 Turn the page over are
shown in parenthesis.  Arbitrary institutional inefficiencies,
measured by the variance of the firms’ perceived institutional
inefficiencies, including tax administration, corruption, political
instability, business licensing and permit, and access to finance,
in that country and in that year;  Acquirer CBA experience in the
region, measured by counting the total number of CBAs that the
acquirer MNE had completed in the target country’s region in the
past;  Acquirer high-tech, a dummy variable based on the SIC code
of the primary business of the acquirer MNE – high-technology firms
are coded as 1 and low- technology firms as 0;  Transaction value,
measured by the logarithm of the total value of the deal; 
Acquirer assets, measured by the financial value of the acquirer
firms’ assets (in millions of pounds);  Cultural distance, the
differences of national cultures between acquirer and target firms.
You are required to answer the following questions: a) Write down
the statistical models for Model 3. b) Suggest whether the results
in Table 3.1 are consistent with any of the six hypotheses. Please
support your answer with detailed analysis (in terms of the
directions and statistical significances of the key explanatory
variables). c) The CEOs in the emerging markets would like to know
how the results of this project can help them make ownership
decisions in CBAs. How would you respond?
VERY URGENT PLEASE RESPOND. THANK YOU.