National Cultural Differences in Cross-Border Mergers and Acquisitions: How Cultural Disparities Affect Deal Performance
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2021-07-26
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en
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Abstract
Cross-border mergers and acquisitions have become an increasingly important practice for
firms that are looking to expand their business internationally. A feature specific to such
ventures is that the firms engaged in these deals are faced with differences between their
national cultures. However, consensus regarding the impact of these cultural differences on
M&A performance is lacking. The purpose of this research is twofold; firstly, to examine the
direct influence of national cultural differences on M&A performance. Secondly, to identify
and investigate variables that may potentially moderate the relationship between these two
factors. An international dataset of 513 cross-border M&A deals that are conducted
between 2009 and 31 July 2019 is consulted to empirically examine this. The findings
indicate that overall, national cultural differences do not have a direct impact on M&A
performance. However, for deals in which the target firm is not located in the United States,
larger national cultural differences are associated with lower performance. In addition,
substantial evidence is found that the acquiring firm’s prior cross-border M&A experience
moderates the relationship between cultural differences and performance. Firms with more
prior experience suffer less from cultural differences than firms with a lower level of prior
experience.
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Faculteit der Managementwetenschappen