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Improving Enterprises’ Cross-Border M&A Sustainability in the Globalization Age—Research on Acquisition and Application of the Foreign Experience

Zaiyang Xie (), Runhui Lin (), Jie Mi () and Na Li ()
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Zaiyang Xie: Business School, Nankai University, Tianjin 300071, China
Runhui Lin: Business School, Nankai University, Tianjin 300071, China
Jie Mi: School of Economics and Management, Taiyuan University of Technology, Taiyuan 030024, China
Na Li: School of Economics and Management, Beijing City University, Beijing 100094, China

Sustainability, 2019, vol. 11, issue 11, 1-19

Abstract: The advancement of globalization has encouraged an increasing number of enterprises to go abroad and take cross-border mergers and acquisitions (M&A) to expand their overseas market and improve core competitiveness, although many acquirers fail to gain value from post-acquisition integration. On the basis of organizational learning theory, this paper explores the effect of executives’ foreign experience on cross-border M&A sustainability, and examines how the externally acquired knowledge can be effectively applied to cross-border M&A practice. Taking a sample of Chinese listed companies that have completed cross-border M&As during 2008–2016, our research proposes an integrated framework of foreign experiential knowledge, and discusses the process of acquisition and application of this experiential knowledge into cross-border M&As. Empirical research findings show that, compared with the general foreign experience, the specific foreign experience based on target country significantly improves cross-border M&A sustainability, and executives with host-specific work experience plays a more important role than that of education experience. Further research found that long-tenured executives positively moderate the effect of foreign experiential knowledge on cross-border M&A sustainability, while the pay gap for executives, which hampers internal coherence, plays a negative moderating role. This research provides a new insight into the promotion of the sustainable development of enterprise cross-border M&A in the globalization age.

Keywords: cross-border M&A sustainability; foreign experience; knowledge application; value creation; executives’ characteristics (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2019
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