Unveiling the influence of host-country religiosity on the completion of cross-border merger and acquisition deals

Zhigang Zuo, Wenquan Zheng, Chengqi Wang, Jiaoyue Su and Malay N. Desai

International Business Review, 2025, vol. 34, issue 5

Abstract: While international business (IB) literature highlights the impact of religious distance on cross-border mergers and acquisitions (CBMAs), limited research has examined how host-country religiosity, defined as the popularity and devoutness of religious beliefs, affects the completion of inward CBMA deals. Using a propensity score matching (PSM) approach and analyzing 4290 CBMA transactions across 105 host countries from 1999 to 2019, we find that higher levels of host-country religiosity reduce the likelihood of CBMA deal completion, independent of religious distance. We further identify increased distrust toward foreign acquirers as a key mediating mechanism. However, a stage-by-stage acquisition strategy, rather than a one-off, full-control approach, mitigates the negative impact of religiosity on deal completion. Our findings contribute to CBMA research by positioning host-country religiosity as a critical determinant of deal outcomes, revealing social trust as a mediating factor, and highlighting the moderating role of acquisition structuring.

Keywords: Cross-border mergers and acquisitions; Religiosity; Social trust; Acquisition strategy (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1016/j.ibusrev.2025.102483

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