The double-edged effect of cultural distance on cross-border acquisition performance

2011 ◽  
Vol 5 (4) ◽  
pp. 327 ◽  
Author(s):  
Mohammad Faisal Ahammad ◽  
Keith W. Glaister
Keyword(s):  
Cultural Distance ◽  
Acquisition Performance ◽  
Cross Border

Post-acquisition control strategy and cross-border acquisition performance of Chinese MNEs: a fsQCA approach

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Qi Yue ◽  
Ping Deng ◽  
Yanyan Cao ◽  
Xing Hua
Keyword(s):  
Fuzzy Set ◽  
Control Strategy ◽  
Multinational Enterprises ◽  
Cultural Distance ◽  
Emerging Market ◽  
Complex Nature ◽  
Acquisition Performance ◽  
Content Type ◽  
Cross Border ◽  
Chinese Mnes

PurposePost-acquisition control is a crucial factor affecting acquisition performance. We investigate how post-acquisition control strategy affects cross-border acquisition performance of Chinese multinational enterprises (MNEs) through a configurational perspective.Design/methodology/approachBased on 70 cross-border acquisition cases by Chinese MNEs, we adopt fuzzy-set qualitative comparative analysis (fsQCA) to study the combined effects of strategic control, operational control, institutional distance, cultural distance, relative capacity and business relatedness on the cross-border acquisition performance.FindingsOn the basis of fuzzy set analysis of multiple interdependent factors, we identify six configurations that are conductive to achieving high cross-border acquisition performance and two configurations that relate to the absence of high performance, thus shedding light on the casually complex nature of performance drivers of acquisitions.Originality/valueThis study provides a holistic, configurational approach to investigating cross-border acquisition performance by emerging market firms. Our results provide some compelling evidence that accounts for the causal complexity of post-acquisition control strategies and acquisition outcomes in the context of emerging economies.

National Cultural Distance and Cross-Border Acquisition Performance

1998 ◽  
Vol 29 (1) ◽  
pp. 137-158 ◽  
Author(s):  
Piero Morosini ◽  
Scott Shane ◽  
Harbir Singh
Keyword(s):  
Cultural Distance ◽  
Acquisition Performance ◽  
Cross Border

scholarly journals Knowledge transfer and cross-border acquisition performance: The impact of cultural distance and employee retention

2016 ◽  
Vol 25 (1) ◽  
pp. 66-75 ◽  
Author(s):  
Mohammad Faisal Ahammad ◽  
Shlomo Yedidia Tarba ◽  
Yipeng Liu ◽  
Keith W. Glaister
Keyword(s):  
Knowledge Transfer ◽  
Employee Retention ◽  
Cultural Distance ◽  
Acquisition Performance ◽  
Cross Border ◽  
The Impact

scholarly journals Going Abroad, Friends on Board: Cross-Border Venture Capital and Syndication Strategy in China

SAGE Open ◽  
2021 ◽  
Vol 11 (2) ◽  
pp. 215824402110074
Author(s):  
Zhiyi Qiu ◽  
Rong Chen ◽  
Ye Yang
Keyword(s):  
Empirical Study ◽  
Venture Capital ◽  
Emerging Markets ◽  
Cultural Distance ◽  
Cross Border ◽  
Entry Strategy ◽  
China Mainland ◽  
Entrepreneurial Activities

Cross-border venture capitals (CBVCs) are increasingly prevailing in recent decades, inter alia in emerging markets like China. The venture capital (VC) firms investing outside their home countries are faced with foreignness which is broadly regarded as liability. The primary aim of this article is to contribute to our understanding how foreignness affects VC’s strategy when entering emerging markets, particularly with respect to the foreignness originated from cultural distance. The data consist of over 5,000 CBVC deals taking place in China mainland from 1988 to 2016. Our empirical study shows that, with foreignness growing, it turns from liability into advantage in the context of CBVCs. We find an inverse U-shape relationship between foreignness and syndication, with VC firm’s reputation as the moderator. Besides, foreign VC firms establish local subsidiary when faced with foreignness, which serves as alternative to syndication. The key contribution of this article is that foreignness turns from liability into advantage in emerging markets, which exerts a curvilinear impact on the entry strategy of VC firms. This study advances the knowledge of foreignness and VC strategy, and sheds new light on entrepreneurial activities in emerging markets.

Added cultural distance and ownership in cross-border acquisitions

2020 ◽  
Vol 27 (3) ◽  
pp. 487-510 ◽  
Author(s):  
Hyun Gon Kim ◽  
Ajai S. Gaur ◽  
Debmalya Mukherjee
Keyword(s):  
Cultural Distance ◽  
Geographic Distance ◽  
Target Firm ◽  
Content Type ◽  
Cross Border ◽  
Focal Firm ◽  
Final Sample ◽  
The Relationship ◽  
Financial Securities ◽  
Different Sources

PurposeAs multinational companies enter different countries, the extent of cultural unfamiliarity they face depends on their most recent entry. We examine this pattern of added cultural distance between a newly entered target country and the closest previous one and its effect on ownership decisions in each cross-border acquisition (CBA). We also examine the combined effect of added cultural distance and time between successive acquisitions on such decisions.Design/methodology/approachThe sample came from the Thomson Financial Securities Data Corporation (SDC) Platinum database, which spans different source and target countries for a 25-year period (1980–2014). We collected firm- (acquirer and target), industry-, country-, and transaction-level variables from SDC. After merging information from the different sources, the final sample comprised 10,423 CBA observations from 138 target countries.FindingsOur findings reveal that the ownership share decision is affected negatively by added cultural distance but positively by the time between two successive acquisitions. In addition, prior ownership and geographic distance moderate the relationship between added cultural distance and ownership in CBAs.Practical implicationsOur findings suggest that MNCs' managers who consider CBAs need to carefully examine closest previous target information and CBA experience, rather than focusing on direct cultural distance between the focal firm and target firm. Additionally, they should also consider the relevance of key contingency factors.Originality/valueWe disentangle the effects of added cultural distance on CBA ownership decisions and explore the boundary conditions of this relationship.

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