National economic disparity and cross-border acquisition resolution

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This paper explores the effects of national economic disparity on the completion or abandonment of cross-border acquisitions by combining behavioral perspectives of risky decision making and theories of organizational learning. Using a sample of 2445 cross-border acquisitions announced between 1985 and 2008, we show that an acquisition is less likely to be completed when the acquirer is from a more developed country vis-a-vis the target than when the acquirer is from a less developed country. Furthermore, the higher the economic development level of the acquirer's country relative to that of the target, the less likely the deal is to be completed. We also find that the time elapsed between the acquisition announcement and completion dates is shorter as the economic development level of the acquirer's country relative to that of the target is higher. (C) 2016 Elsevier Ltd. All rights reserved.
Publisher
ELSEVIER SCIENCE BV
Issue Date
2017-04
Language
English
Article Type
Article
Keywords

M-AND-A; CULTURAL DISTANCE; FIRMS LEARN; MERGERS; PERFORMANCE; EXPERIENCE; DETERMINANTS; DECISION; RISK; PERSPECTIVES

Citation

INTERNATIONAL BUSINESS REVIEW, v.26, no.2, pp.354 - 364

ISSN
0969-5931
DOI
10.1016/j.ibusrev.2016.09.004
URI
http://hdl.handle.net/10203/223421
Appears in Collection
MT-Journal Papers(저널논문)
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