The impact of cultural differences on the performance of mergers and acquisitions
Keywords
Loading...
Authors
Issue Date
2016-08-22
Language
en
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
Despite the increasing importance of cross-border mergers and acquisitions (M&A), there is no economic consensus regarding the effect of cultural differences on the performance of M&A. The purpose of this paper is twofold; firstly, empirically determine the impact of cultural differences on the performance of M&A by a quantitative analysis. Secondly, through qualitative analysis explore the potential impact of cultural differences on the integration process as a possible explanation for the previous contradictory findings. In the first part, multilevel regressions were performed for 5 096 mergers in 81 different countries. In the second part three in-depth interviews were conducted with executives of three cross border merged companies. Main results showed that, M&A performances were lower when countries were more culturally distant. These findings were robust to different years. The qualitative part showed that the outcomes of M&A were dependent upon the development of the integration process. When taking into account the cultural differences within the integration process, M&A performances not necessarily suffered from cultural differences. The way cultural differences were handled within the integration process could be the reason for the contradictory outcomes of previous researches.
Description
Citation
Supervisor
Faculty
Faculteit der Managementwetenschappen