TY - JOUR
T1 - Overcoming institutional challenges in cross-border acquisitions
T2 - how home- and host-country acquisition experiences shorten the deal completion phase
AU - Soleimani, Abrahim
AU - Yang, K. Michelle
N1 - Publisher Copyright:
© 2022, Emerald Publishing Limited.
PY - 2022
Y1 - 2022
N2 - Purpose: Drawing on the institutional theory and organizational learning literature, the purpose of this study is to investigate the relationship between prior acquisition experience and the duration of the deal completion stage in cross-border acquisitions and the impacts of the quality of business institutions in the host country and the institutional distance between home and host countries on this relationship. Design/methodology/approach: This study uses the sixth wave of mergers and acquisitions, the first truly global wave that covered a wide range of institutional settings, to test the hypotheses. Using a panel data regression method, it analyzes 8,175 cross-border acquisitions from 2003 to 2009, conducted by acquirers from 47 advanced and emerging economies in 56 advanced and emerging economies. Findings: This study finds that host-country acquisition experience has more impact on shortening deal completion duration. Home-country acquisition experience is more effective in host countries with less developed business institutions than in those with more developed ones. The results of this study show that the quality of business institutions in the host country and the institutional distance between the home and host countries amplify or attenuate the effect of past acquisition experiences, depending on their origin and the quality of business institutions and institutional distance of where they are used. Originality/value: The growing popularity of cross-border acquisitions among emerging country acquirers calls for a systemic study of the cross-border acquisition process. One of the critical and less understood stages in this process is the deal completion stage. This study examines how the institutional environments in the home and host countries impact the effectiveness of past acquisition experiences on shortening this stage.
AB - Purpose: Drawing on the institutional theory and organizational learning literature, the purpose of this study is to investigate the relationship between prior acquisition experience and the duration of the deal completion stage in cross-border acquisitions and the impacts of the quality of business institutions in the host country and the institutional distance between home and host countries on this relationship. Design/methodology/approach: This study uses the sixth wave of mergers and acquisitions, the first truly global wave that covered a wide range of institutional settings, to test the hypotheses. Using a panel data regression method, it analyzes 8,175 cross-border acquisitions from 2003 to 2009, conducted by acquirers from 47 advanced and emerging economies in 56 advanced and emerging economies. Findings: This study finds that host-country acquisition experience has more impact on shortening deal completion duration. Home-country acquisition experience is more effective in host countries with less developed business institutions than in those with more developed ones. The results of this study show that the quality of business institutions in the host country and the institutional distance between the home and host countries amplify or attenuate the effect of past acquisition experiences, depending on their origin and the quality of business institutions and institutional distance of where they are used. Originality/value: The growing popularity of cross-border acquisitions among emerging country acquirers calls for a systemic study of the cross-border acquisition process. One of the critical and less understood stages in this process is the deal completion stage. This study examines how the institutional environments in the home and host countries impact the effectiveness of past acquisition experiences on shortening this stage.
KW - Acquisition experience
KW - Cross-border acquisitions
KW - Deal completion stage
KW - Institutional distance
KW - Institutional quality
KW - Organizational learning
UR - http://www.scopus.com/inward/record.url?scp=85125799760&partnerID=8YFLogxK
U2 - 10.1108/MBR-03-2021-0024
DO - 10.1108/MBR-03-2021-0024
M3 - Article
AN - SCOPUS:85125799760
JO - Multinational Business Review
JF - Multinational Business Review
SN - 1525-383X
ER -