scholarly journals The Influence of Nation-Level Institutions on Acquisition Premiums: A Cross-Country Comparative Study

2021 ◽  
pp. 014920632110102
Author(s):  
Chengguang Li ◽  
Jerayr (John) Haleblian
Keyword(s):  
Comparative Study ◽  
Institutional Theory ◽  
Cultural Values ◽  
Reference Frames ◽  
Future Orientation ◽  
Information Asymmetries ◽  
Disclosure Requirements ◽  
Cross Country ◽  
Acquisition Premium ◽  
Industry Peers

We build on neo-institutional theory to examine the manner in which nation-level institutions systematically affect domestic acquisitions—that is, acquisitions involving acquirers and targets from the same country. Specifically, we study in what way premiums are influenced through a set of cognitive, normative, and regulatory forces. In terms of cognitive pressures, we theorize that prior premium decisions of industry peers in the same country influence focal acquisition premiums, since prior premium decisions serve as reference frames for firms. In addition, we posit that normative forces in the form of the national cultural values of uncertainty avoidance, future orientation, and in-group collectivism affect bid premiums, as these factors influence the manner in which firms deal with the uncertainty, payoff time, and merger of groups inherent to acquisitions. Furthermore, we propose that a country’s regulatory pressures through its disclosure requirements influence premiums, since they reduce information asymmetries and affect a firm’s confidence in assessing its potential gains from acquisitions. Using a sample of domestic acquisitions, we find support for several of the hypotheses. Our work offers a cross-country comparative study of how nation-level institutions affect domestic bid premiums and makes theoretical contributions to acquisition premium research and institutional theory.

Connections Between Cultures: Using Empirical Distributions for Measuring Cultural Differences

2020 ◽  
pp. 002202212098237
Author(s):  
Wolfgang Messner
Keyword(s):  
Cultural Values ◽  
Cultural Differences ◽  
Distance Measures ◽  
Cultural Variation ◽  
Group Level ◽  
Psychological Phenomena ◽  
Empirical Distributions ◽  
Leibler Divergence ◽  
Country Differences ◽  
Cross Country

The past few decades have seen an explosion in the interest in cultural differences and their impact on many aspects of business management. A noticeable feature of most academic studies and practitioner approaches is the predominant use of national boundaries and group-level averages as delimiters and proxies for culture. However, this largely ignores the significance that intra-country differences and cross-country similarities can have for identifying psychological phenomena. This article argues for the importance of considering intra-cultural variation for establishing connections between two different cultures. It uses empirical distributions of cultural values that occur naturally within a country, thereby making intracultural differences interpretable and actionable. For measuring cross-country differences, the Gini/Weitzman overlapping index and the Kullback-Leibler divergence coefficient are used as difference measures between two distributions. The properties of these measures in comparison to traditional group-level mean-based distance measures are analyzed, and implications for cross-cultural and international business research are discussed.

scholarly journals Sovereign Wealth Funds’ Affiliation and Acquisition Premium: Evidence from the Asia-Pacific Region

2019 ◽  
Vol 8 (1) ◽  
pp. 25-49
Author(s):  
Ali Awais Khalid ◽  
Ghulame Rubbaniy ◽  
Muhammad Faisal Rizwan ◽  
Hassan Rauf Chaudhry
Keyword(s):  
Bargaining Power ◽  
Asia Pacific ◽  
Asia Pacific Region ◽  
Sovereign Wealth Funds ◽  
Sectoral Analysis ◽  
The North ◽  
Target Firms ◽  
Country Analysis ◽  
Cross Country ◽  
Acquisition Premium

This study aims to extend the signaling theory, by offering the buy-side sovereign wealth fund’s (SWF) affiliation as a signal of the acquisition premium. Using the mergers and acquisitions (M&As) deals’ data from Asia-Pacific, over the period from 2000-2017, the results reveal that the effect of buy-side SWF’s affiliation, on the acquisition premium of target firms is negative, and statistically significant in the North Asian region. Our cross-country analysis shows a negatively significant effect of the buy-side SWF’s affiliation on the acquisition premium in China. The findings of our sectoral analysis report a significantly adverse effect of SWF’s affiliation on the acquisition premium in the energy and cyclical goods sector. This suggests that the SWFs are likely to be more influential in M&As deals that are conducted in the strategic sectors. Our findings demonstrate that the buy-side SWF’s affiliation can be used as a signal of quality. That is to say that this affiliation increases the bargaining power of buyers to reduce the acquisition premium for targets. The findings are particularly important for the managers of firms managing SWFs’ investments, as they can negotiate better deals with the targets due to the managers’ affiliation with the SWFs.

Religion and Institutional Quality: Long-Term Effects of the Financial Systems in Protestantism and Islam

2020 ◽  
Vol 52 (3) ◽  
pp. 433-454
Author(s):  
Rasmus Broms ◽  
Bo Rothstein
Keyword(s):  
Cultural Values ◽  
Ottoman Empire ◽  
Institutional Quality ◽  
Long Term Effects ◽  
Norms And Values ◽  
Micro Level ◽  
Cross Country ◽  
Virtuous Cycle ◽  
Parish System

Religion is one of the most commonly cited explanations for cross-country variation in institutional quality. In particular, Protestantism, and the cultural values that follow from its doctrine, has been identified as particularly beneficial. Nevertheless, micro-level studies provide little evidence for religion producing norms and values conducive to good institutions. We propose an alternate explanation for the observed macro-level variation: historical systems for local religious financing, contrasting the medieval parish system in Northwestern Europe, where members collectively paid for and administrated religious services as public goods, with the Ottoman Empire, where such goods were normally provided through endowments from private individuals and tax collection was comparatively privatized. We argue that a legacy of collective financing and accountability in the former region created a virtuous cycle of high state capacity and low corruption, reverberating to this day as good institutions.

scholarly journals Religion, national culture and cross-country differences in the use of trade credit

2019 ◽  
Vol 15 (3) ◽  
pp. 350-370
Author(s):  
Markus Mättö ◽  
Mervi Niskanen
Keyword(s):  
Cultural Values ◽  
National Culture ◽  
Trade Credit ◽  
Cultural Dimensions ◽  
Firm Level ◽  
Content Type ◽  
Cross Country ◽  
New Evidence ◽  
The Relationship ◽  
Practical Implications

Purpose The purpose of this paper is to investigate whether religion or national culture can explain previously observed cross-country variation in trade credit. Design/methodology/approach Using the firm-level SME data from 35 European countries, religion and cultural factors of Hofstede and Schwartz, the authors provide new evidence on the determinants of the cross-country variation in trade credit. Findings The results indicate that religion and national culture are associated with trade credit. The authors find that the levels of trade credit are higher in Catholic countries than in Protestant ones and that peoples’ religiousness has an impact on trade credit only in Catholic countries. The authors also find that Hofstede’s cultural dimensions, such as power distance and uncertainty avoidance, are positively associated with trade credit. Practical implications Overall, authors’ findings indicate that religion and national culture are important determinants of trade credit management, and that the association between commonly used cultural values and trade credit depends on the religious, legal, and financial environment. Originality/value To the best of authors’ knowledge, this is the first study to research the relationship between national culture and trade credit.

CEO duality and bribery: the roles of gender and national culture

2017 ◽  
Vol 55 (1) ◽  
pp. 218-231 ◽  
Author(s):  
Kristine Velasquez Tuliao ◽  
Chung-wen Chen
Keyword(s):  
Cultural Values ◽  
National Culture ◽  
Hierarchical Linear Modeling ◽  
Future Orientation ◽  
Cultural Analysis ◽  
Cross Cultural ◽  
Management Decision ◽  
Ceo Duality ◽  
Content Type ◽  
The Impact

Purpose The purpose of this paper is to investigate the cross-cultural impact of CEO-Chair’s gender to the likelihood of CEO duality firm’s bribery. Design/methodology/approach Hierarchical linear modeling was used to analyze data of 5,837 CEO duality firms from 21 countries. Findings Firms with male CEO-Chairs were found to have higher propensity to bribe than their female counterparts. Moreover, cultural values of institutional collectivism and performance orientation strengthened gender’s impact to bribery. In contrast, future orientation weakened the gender-bribery relationship, as opposed to the proposed effect. Practical implications Key findings of this study can be utilized to increase awareness and widen perspective on the roles of CEO-Chair’s gender and national culture on bribery. These can also be useful in the selection of CEO-Chair, design of educational programs on ethics as well as government and non-governments’ programs and policies to minimize incidents of bribery. Originality/value There are no existing studies on CEO duality firm’s bribery which performed cross-cultural analysis on the impact of CEO-Chair’s gender, making the study a novel contribution to business ethics, organizational structure, corporate governance, management decision, transparency, and accountability.

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