The effect of cultural and institutional factors on initiation, completion, and duration of cross-border acquisitions

Edward R. Lawrence, Mehul Raithatha and Ivan Rodriguez

Journal of Corporate Finance, 2021, vol. 68, issue C

Abstract: We study the effect of cultural and institutional distances on the probability that a firm from an acquiring country announces an acquisition of a firm in a target country (initiation), the probability that an announced deal is completed (completion), and the average time it takes to complete an acquisition (duration). We find that culture plays a decisive role in deal initiation. Completion and duration of a deal is largely unaffected by the cross country cultural and institutional differences and depends on deal level characteristics. We find a higher probability for acquirers to hire Top-tier advisors when they initiate deals in countries with higher cultural differences. We also find that use of Top-tier advisors by acquirers increases the probability of completion of the deal.

Keywords: Country culture; Institutions; Cross-border mergers and acquisitions; Mergers and acquisitions; Top-tier advisor; Deal completion (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0929119921000717
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:68:y:2021:i:c:s0929119921000717

DOI: 10.1016/j.jcorpfin.2021.101950

Access Statistics for this article

Journal of Corporate Finance is currently edited by A. Poulsen and J. Netter

More articles in Journal of Corporate Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().