The Role of Confucius Institutes and One Belt, One Road Initiatives on the Values of Cross-Border M&A: Empirical Evidence from China

Jin-Young Jung, Wei Wang and Sung-Woo Cho
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Jin-Young Jung: College of Business Administration, Inha University, Incheon 22212, Korea
Wei Wang: College of Business Administration, Inha University, Incheon 22212, Korea
Sung-Woo Cho: College of Computing, Sungkyunkwan University, Seoul 27125, Korea

Sustainability, 2020, vol. 12, issue 24, 1-20

Abstract: This study examines how national cultural policies such as Confucius Institutes and One Belt, One Road initiatives (BRI) affect the post-acquisition returns of Chinese cross-border mergers and acquisitions based on data from a sample of 192 transactions covering 2011 to 2015. We find that the cultural export of Chinese Confucius Institutes and the BRI exert a significantly positive impact on long-term acquirer returns, while cultural/institutional distance exerts a negative impact. Further evidence shows that Confucius Institutes and BRI mitigate the negative effect of cultural distance between merging firms. These results offer the first evidence that national cultural translation has substantial impacts on the long-run acquirer financial performance of cross-border mergers that decrease cultural institutional heterogeneity between countries.

Keywords: Confucius Institutes; cultural distance; institutional distance; One Belt One Road initiative (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:12:y:2020:i:24:p:10277-:d:459066

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