Which Cross-Border Mergers and Acquisitions Create or Destroy Value to Listed Acquirer’s Bank? The Role of Difference in Regulatory Arbitrage, Governance and Institution between Acquirers and Targets

2010 ◽  
Author(s):  
Sheng-Hung Chen ◽  
Mei-Hsin Hsiao
Keyword(s):  
Mergers And Acquisitions ◽  
Regulatory Arbitrage ◽  
Cross Border

scholarly journals Selecting Legal Advisors in M&As: Organizational Learning and the Role of Multiplicity of Mental Models

2018 ◽  
Vol 45 (5) ◽  
pp. 2193-2224 ◽  
Author(s):  
Bastian Westbrock ◽  
Katrin Muehlfeld ◽  
Utz Weitzel
Keyword(s):  
Organizational Learning ◽  
Mergers And Acquisitions ◽  
Mental Models ◽  
Selection Criteria ◽  
Turning Point ◽  
Firm Characteristics ◽  
Selection Rules ◽  
Cross Border ◽  
Country Specific

Management scholars have identified a variety of firm characteristics as antecedents to organizational learning. In this study, we conceptualize intraorganizational multiplicity of mental models as a complementary element that facilitates shifting from lower- to higher-level learning. Specifically, we investigate whether multiplicity of mental models—proxied by four measures—helps acquirers to categorically adapt selection rules for legal advisors in mergers and acquisitions (M&As) from domestic toward international settings. In developing our conceptual framework, we integrate resource-based, social network, and organizational learning perspectives. Empirically, we draw on 11,511 acquisition attempts announced from 1998 to 2010 (completion/abandonment assessed as of January 10, 2015, at the latest). The results largely support our theory: First, choosing legal advisors in domestic and international deals calls for different selection rules. While in domestic deals, network-related characteristics are more important drivers of lawyers’ performance relative to their country-specific expertise, the comparative relevance of these attributes is reversed in cross-border deals. Yet, initially, acquirers fail to recognize this. Also, they do not initially adjust their selection criteria appropriately in response to accumulating M&A experience of their own. Only after having attempted a substantial number of cross-border M&As, they reach a turning point at which they rebalance their selection criteria such that they reflect the predominant relevance of country expertise in cross-border settings. Finally, recognition of the need to categorically reassess selection criteria in international deals is significantly facilitated by an acquirer’s multiplicity of mental models.

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