Is cultural distance a bane or a boon for cross-border acquisition performance?

Dikova, Desislava; Sahib, Padma Rao

doi:10.1016/j.jwb.2012.06.009

Cited by 149 publications

(85 citation statements)

References 70 publications

(97 reference statements)

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“…Research that combines insights from both acquisition performance (Nadolska and Barkema 2007;Reus and Lamont 2009;Dikova and Rao Sahib 2013) and establishment mode choice can help both areas move closer together and improve our understanding of why many acquisitions fail (King et al 2004). …”

Section: New Theories and Issuesmentioning

confidence: 99%

International Establishment Mode Choice: Past, Present and Future

Dikova

Brouthers

2015

Manag Int Rev

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Despite over three decades of research focusing on the choice multinational enterprises make between establishing foreign operations through either cross-border acquisitions or greenfield start-ups our understanding of the issues that impact this choice and the performance outcomes of making this decision is still unclear. To help improve knowledge in this area we provide a comprehensive review of the empirical studies on international establishment mode choice published between 1980 and 2015. Through this method we gain a greater understanding of the theories used, the variables employed, and the empirical results. In this way we can detect inconsistencies and offer suggestions for future research. We identify a number of issues that future studies need to address: changes to the models, introducing new theories or combining theories, applying new or better methods, and most importantly linking this choice to performance. Hence, our study consolidates knowledge in this area and highlights several ways to improve our understanding of the international establishment mode decision.

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Section: New Theories and Issuesmentioning

confidence: 99%

International Establishment Mode Choice: Past, Present and Future

Dikova

Brouthers

2015

Manag Int Rev

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“…An important M&A research strand focusing on merger integration seems to indicate that human factors are major reasons for failure (Björkman, Stahl, & Vaara, 2007;Calori, Lubatkin, & Very, 1994;Cartwright & Schoenberg, 2006;Dikova & Rao Sahib, 2013;Edwards & Edwards, 2013;Gomes, Cohen, & Mellahi, 2011;Gomes, Weber, et al, 2011;Ranft & Lord, 2002;Sarala, Junni, Cooper, & Tarba, 2014;Schweiger & Denisi, 1991;Stahl et al, 2013;Stahl, Larsson, Kremershof, & Sitkin, 2011;Stahl & Voigt, 2008;Teerikangas & Very, 2006;Weber et al, 2012;Weber et al, 1996;. However, despite the significant amount of research carried out on the human side of M&A, the psychological dimension of the phenomenon has been disregarded.…”

Section: Background Literature and Hypotheses Development Imentioning

confidence: 99%

Perceptions of justice and organisational commitment in international mergers and acquisitions

Gomes

Mellahi

Sahadev

et al. 2017

IMR

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Purpose Although there is substantial and accumulating evidence on the link between market entry modes and performance, evidence regarding their impact on employee’s perceptions and thereby their commitment is scarce. This is more so in mergers and acquisitions (M&As) where employee’s commitment has a significant impact on post-entry performance. The purpose of this paper is to examine the association between perceptions of justice and organisational commitment in cross-border M&As. Design/methodology/approach The authors draw on market entry and M&As’ literature and studies on the link between perception of justice and commitment to develop the hypotheses. The authors test the hypotheses with survey data from a merger of two culturally different partners – British and Japanese. A total of 128 responses were received, out of a sample of 151 non-managerial employees within the firm. Findings The results show a strong association between employees’ perceptions of justice during the merger and commitment to the new organisation. Surprisingly, the results do not support the widely reported interaction effects between different organisational justices and employees’ commitment. Research limitations/implications Obtaining data from a single M&A is a potential limitation of this study. Practical implications The study underscores the importance of post-market entry. The results suggest that particular attention needs to be paid to the way employees of the acquired firm are treated during their interactions with their counterparts. Originality/value The link between market entry and performance is well documented. However, little progress has been made in understanding the antecedents/factors that influence commitment in foreign market entry and in particular cross-border M&As. This study helps close this gap.

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“…Vaara 2003;Stahl et al 2012), and post-acquisition performance (e.g. Dikova and Sahib 2013;Chang and Tsai 2013). Only a few studies have studied the circumstances surrounding MNEs' preferences for partial or full acquisitions.…”

Section: Introductionmentioning

confidence: 99%

Influences of Institutional Distance and MNEs’ Host Country Experience on the Ownership Strategy in Cross-Border M&As in Emerging Economies

Arslan

Dikova

2015

Journal of Transnational Management

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ABTRACT:This paper analyzes ownership strategy in cross-border mergers and acquisitions (CB M&As) undertaken by the multinational enterprises (MNEs) in emerging economies. We use new institutional economics and organizational learning theories to hypothesize and empirically analyze the influence of formal and informal institutional distance, and MNEs' host country experience on the MNEs' choice between full and partial CB M&As. The empirical analysis is based on a sample of 184 CB M&As launched by MNEs in emerging economies. Our empirical results revealed that high formal and informal institutional distances lead to a preference for partial CB M&As however, MNEs' host country experience moderated the relationship between institutional distance and the MNEs' choice between full and partial CB M&As. We found that MNEs with prior investment experience in the focal emerging market opted for full CB M&As over partial CB M&As despite high formal and informal institutional differences.

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Is cultural distance a bane or a boon for cross-border acquisition performance?

Cited by 149 publications

References 70 publications

International Establishment Mode Choice: Past, Present and Future

International Establishment Mode Choice: Past, Present and Future

Perceptions of justice and organisational commitment in international mergers and acquisitions

Influences of Institutional Distance and MNEs’ Host Country Experience on the Ownership Strategy in Cross-Border M&As in Emerging Economies

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