Understanding the influence of Power Distance on Long-term M&A Performance: Exploring the moderator role of Speed Of Integration
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2024-07-04
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en
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Cross-border mergers and acquisitions (M&A) have emerged as a vital growth strategy for companies seeking global expansion, yet the failure rates remain alarmingly high. Previous research has indicated that cultural differences between the acquirer and target countries impact long-term M&A performance, though findings have been mixed and inconclusive. These inconsistencies may stem from a lack of differentiation among various cultural factors. Drawing on Hofstede’s cultural dimensions theory (1980) and the Social Identity Theory (1969), this study contributes to existing literature by exclusively focusing on one specific national dimension, namely Power Distance (PDV) and its relation to long-term M&A performance. Furthermore, the study examines the moderating effect of integration speed, a relatively unexplored area in the literature. Findings show no significant relationship between Power Distance and long-term M&A performance, nor between the interaction term. However, a notable negative direct effect is found between the speed of integration on long-term M&A performance. These findings offer valuable insights into the global debate on cross-border M&A, emphasizing that Power Distance between an acquiring and target country does not determine long-term M&A performance. Instead, the speed of integration plays a crucial role, highlighting the need for carefully managing the length of the integration process in cross-border M&A.
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Faculteit der Managementwetenschappen