Cultural Distance and Cross-border Mergers & Acquisitions: The moderating role of Acquirer characteristics

Boateng, Agyenim; Du, Min; Bi, Xiaogang; Lodorfos, George

Abstract

This paper examines the effects of culture and the interaction between cultural distance and salient acquirer characteristics on value creation of acquiring firms based on a sample of 397 firms over the period of 1998-2012. The findings indicate that Chinese acquirers experience wealth gains ranging from 0.4458% –1.4869% over a 10-day event window. We also find cultural distance to exert a negative and significant influence on value creation of acquirers. Further evidence shows that large acquirer size, prior experience and high Tobin’s q positively moderate the link between cultural distance and value creation. The findings suggest that the effect of culture distance is conditioned by the acquirer size, prior experience and Tobin’s q implying that acquirer resources and managerial capabilities are important in dealing with and overcoming CBM&A cultural challenges

Citation

Boateng, A., Du, M., Bi, X., & Lodorfos, G. (2018, September). Cultural Distance and Cross-border Mergers & Acquisitions: The moderating role of Acquirer characteristics. Paper presented at The 26th Annual Conference on Pacific Basin Finance, Economics, Accounting, and Management, Rutgers University, USA

• Presentation Conference Type: Conference Paper (unpublished)
• Conference Name: The 26th Annual Conference on Pacific Basin Finance, Economics, Accounting, and Management
• Start Date: Sep 6, 2018
• End Date: Sep 7, 2018
• Deposit Date: Nov 30, 2022
• Public URL: http://researchrepository.napier.ac.uk/Output/2967980
• Publisher URL: http://pbfea2005.rutgers.edu/2018PBFEAM/26th%20PBFEAM%20Conference%20Program_180810.pdf