 Cross-border mergers and acquisitions: The interplay of cultural differences and prior M&A activityFatos Radoniqi and Roger White The Quarterly Review of Economics and Finance, 2025, vol. 102, issue C Abstract: We examine the extent to which cross-border mergers and acquisitions (M&A) are affected by national cultural differences (i.e., cultural distance) and prior M&A activity. Our empirical specification follows the standard gravity framework. Estimating a series of Tobit models using bilateral data that represent 9389 mergers involving firms in 30 countries over three periods (1995–1998, 2005–2008, and 2017–2020), we find a negative but declining influence of cultural distance on cross-border M&A activity. We also find merger activity involving firms in a particular country pair is positively related to subsequent M&A activity and that this experience counteracts the hindering influence of cultural differences, which becomes insignificant after approximately ten prior mergers. Our findings are robust to sample composition, choice of periods examined, model specification, estimation technique, and alternative measurements of both cultural distance and prior M&A activity. Keywords: Cross-border mergers and acquisitions (M&A); Cultural distance; Learning by doing/observing practice; World Values Survey (WVS) (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:102:y:2025:i:c:s1062976925000493 DOI: 10.1016/j.qref.2025.102008 Access Statistics for this article The Quarterly Review of Economics and Finance is currently edited by R. J. Arnould and J. E. Finnerty More articles in The Quarterly Review of Economics and Finance from Elsevier |
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