Inside the board room: the influence of nationality and cultural diversity on cross-border merger and acquisition outcomes

Cao, Jian; Ellis, Kimberly M.; Li, Mingxiang

doi:10.1007/s11156-018-0774-x

Cited by 47 publications

(30 citation statements)

References 61 publications

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“…This could lead them to damage FRQ due to not fully concentrating on the process of financial reporting and not being aware of the country context. Cao et al (2019) find that the negative role of foreign directors in the strategic decision-making process is due at least in part to the cultural differences between board directors, especially in transactions with a high degree of uncertainty. They confirm the argument that national cultural diversity hinders communication and collaboration within boards.…”

Section: Ac Foreign Membership and Fldmentioning

confidence: 93%

Disclosure quality vis-à-vis disclosure quantity: Does audit committee matter in Omani financial institutions?

Lawati

Hussainey

Sagitova

2021

Rev Quant Finan Acc

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We examine the impact of audit committee (AC) characteristics (e.g. AC foreign members, AC female members, AC members with multiple directorships, AC members with share ownership and AC with financial and supervisory expertise) on forward-looking disclosure (FLD) quality and quantity. Using a sample of Omani financial companies listed on Muscat Securities Market over a five-year period (2014–2018), we find that a number of AC characteristics (such as AC size, AC female members and AC with multiple directorships) improve FLD quality. We make no such observation for FLD quantity. The results suggest that the responsibility of AC extends to improving the quality of FLD. We provide an additional analysis on the impact of AC effectiveness (ACE) on FLD quality, which suggests that companies’ compliance with CG code is beneficial for disclosure quality. We also find that the impact of ACE on FLD quality is influenced by corporate performance, leverage and the quality of external auditors. Our findings carry implications for the regulatory bodies’ efforts in encouraging companies to improve disclosure quality by considering AC characteristics as well as appointing more effective AC directors.

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Section: Ac Foreign Membership and Fldmentioning

confidence: 93%

Disclosure quality vis-à-vis disclosure quantity: Does audit committee matter in Omani financial institutions?

Lawati

Hussainey

Sagitova

2021

Rev Quant Finan Acc

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“…Recently, scholars have paid increased attention to board directors’ resource provision role and its impact on corporate‐level risk‐taking behaviors such as innovation (Balsmeier, Fleming, and Manso, ) and cross‐board merger and acquisitions (Cao, Ellis, and Li, ). Specifically, Balsmeier et al’s () empirical evidence seems to support the conclusion that independent boards are important for corporate innovation because board directors can advise managers in pursuing certain technologies, while Cao et al’s () results suggest that presence of foreign directors positively affects cross‐border merger and acquisitions but negatively influences post‐acquisition performance. In practice, many firms in the United States have created innovation committees; for instance, Procter and Gamble has an Innovation and Technology committee and Pfizer created a Science and Technology committee.…”

Section: Theory and Hypothesesmentioning

confidence: 99%

“…The well‐recognized monitoring role influences corporate governance, CEO compensation, CEO appointment, and acquisition premiums (Adams, Hermalin, and Weisbach, ), whereas the resource provision role enables the focal firm to obtain otherwise inaccessible resources (Miletkov, Poulsen, and Wintoki, ). Recently, scholars have paid increased attention to board directors’ resource provision role and its impact on corporate‐level risk‐taking behaviors such as innovation (Balsmeier, Fleming, and Manso, ) and cross‐board merger and acquisitions (Cao, Ellis, and Li, ). Specifically, Balsmeier et al’s () empirical evidence seems to support the conclusion that independent boards are important for corporate innovation because board directors can advise managers in pursuing certain technologies, while Cao et al’s () results suggest that presence of foreign directors positively affects cross‐border merger and acquisitions but negatively influences post‐acquisition performance.…”

Section: Theory and Hypothesesmentioning

confidence: 99%

Diversity of Board Interlocks and the Impact on Technological Exploration: A Longitudinal Study

Li¹

2019

J of Product Innov Manag

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Scholars have given increased attention to organizational networks as an important component of technological innovation. Although a significant body of research has examined the implications of organizational networks on knowledge diffusion, researchers know little about the impacts that diverse network interlocks have on corporate innovation outputs. To address this gap in the literature, this article draws upon insights from organizational learning and social network theory and argues that interlocked networks affect corporate innovation. Further, interlocks differ in terms of both the heterogeneity of tied‐to firms—ties created through shared board directors—and the directors who create these ties. Accordingly, this study proposes that more diverse interlocks will have a greater impact on corporate technological exploration. To test this proposal, data from multiple sources were analyzed, including historical records of board appointments and data on technological innovations from U.S. public companies. Empirical results from generalized estimating equations suggest that the industrial diversity of interlocked firms increases the likelihood of technological exploration. Moreover, interlocks with R&D‐intensive firms are more important for technological exploration than those created by firms that do not invest heavily in R&D. There is no empirical evidence demonstrating that the ratio of interlocks created by directors with output‐oriented experience enhances technological exploration. Overall, this research reveals that diversity of leader‐created board interlocks can be an important mechanism for fostering corporate entrepreneurial activities such as technological exploration.

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“…The presence of a larger number of independent directors forces managers to abandon a bad deal (Liu and McConnell, 2013). However, Cao et al (2019) find that foreign directors hinder communication and decrease collaboration in board meetings leading to less profitable CBMA deals.…”

Section: Content Analysismentioning

confidence: 99%

Abandonment of mergers and acquisitions: a review and research agenda

Kumar

Sengupta

2020

IJOEM

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PurposeThe purpose of this study is to provide a broad understanding of the pre-completion stage and subsequent abandonment of mergers and acquisitions (M&As).Design/methodology/approachA total of 117 peer-reviewed, English language articles published in scholarly journals were considered in the review. The approach includes a descriptive evaluation of the literature, coupled with content analysis. The paper uses both positivist and constructivist approaches to qualitative research. The analysis is conducted with the help of R programming and Gephi visualization software. The authors organize the work around the event of outcome/closure of deal proposal.FindingsIt is found that earlier studies sampled on domestic M&As in developed economies (DEs). However, the interest of scholars has increased in cross-border deals and emerging economies (EEs) in the last decade. Various factors interact and facilitate the completion/abandonment of good and bad deals. The authors find that complex non-linear relationships exist, and there is a need for studies with other classification techniques focusing on predictive accuracy.Research limitations/implicationsThe literature review is limited to articles available to the researcher using search terms related to M&A completion/termination. The databases accessed were: ProQuest, Scopus and Web of Science. However, backward snowballing was performed to avoid the omission of relevant articles.Originality/valueThe findings and subsequent discussions familiarize researchers and practitioners with an overview of research undertaken in the field of M&A abandonment. The authors find voids within the literature and suggest future research agendas.

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Inside the board room: the influence of nationality and cultural diversity on cross-border merger and acquisition outcomes

Cited by 47 publications

References 61 publications

Disclosure quality vis-à-vis disclosure quantity: Does audit committee matter in Omani financial institutions?

Disclosure quality vis-à-vis disclosure quantity: Does audit committee matter in Omani financial institutions?

Diversity of Board Interlocks and the Impact on Technological Exploration: A Longitudinal Study

Abandonment of mergers and acquisitions: a review and research agenda

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