Geographic distance in cross-border acquisitions: The impact of CEO's psychological attributes

Viswa Prasad Gada, Manish Popli and Shavin Malhotra

Journal of International Management, 2024, vol. 30, issue 1

Abstract: This study examines the influence of acquiring firm CEOs' psychological attributes on the geographic distance of target firms in cross-border acquisitions. Drawing on the regulatory focus theory, we argue that CEOs with a higher dispositional prevention focus are more vigilant and loss-aversive, avoiding target firms at a greater geographic distance in cross-border acquisitions. Furthermore, building on the concept of regulatory misfit, we examine the moderating effect of acquiring firm CEOs' context-specific experience and the munificence of acquiring firms' industries in priming the dispositional prevention focus. In a sample of 218 cross-border acquisitions by public firms from the United Kingdom from 2006 to 2014, we find support for our hypotheses. This study emphasizes the role of micro-foundations in cross-border acquisitions and deepens the understanding of cross-border acquisition location choice decisions.

Keywords: CEO; Cross-border mergers and acquisitions; Geographic distance; Location choice; Prevention focus; Regulatory focus theory (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1016/j.intman.2023.101115

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