Cultural heterogeneity, acquisition experience and the performance of Chinese cross-border acquisitions

Lili Kang, Fei Peng and Sajid Anwar

Journal of the Asia Pacific Economy, 2023, vol. 28, issue 2, 738-765

Abstract: Using data over the 2010-2015 period, we investigate the effect of cultural heterogeneity and cross-border acquisition experience on post-acquisition performance of Chinese publicly listed companies (PLCs). We find that between and within cultural heterogeneity has a negative and statistically significant effect on post-acquisition performance, but the effect of acquisition experience on post-acquisition performance is positive. We find that the dynamic marginal effects of cultural heterogeneity and acquisition experience on post-acquisition performance of Chinese PLCs are contingent on the scale of acquisition. Chinese PLCs can improve their post-acquisition performance by overcoming the issues arising from cultural heterogeneity, accumulating acquisition experience, and exploiting economies of scale. However, in the case of state-owned PLCs, prior cross-border acquisition experience can adversely affect the performance of new cross-border acquisitions.

Date: 2023
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DOI: 10.1080/13547860.2021.1950112

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