Knowledge Transfer and Cross Border Acquisition Performance: The Impact of Cultural Distance and Employee Retention

PurposePost-acquisition control is a crucial factor affecting acquisition performance. We investigate how post-acquisition control strategy affects cross-border acquisition performance of Chinese multinational enterprises (MNEs) through a configurational perspective.Design/methodology/approachBased on 70 cross-border acquisition cases by Chinese MNEs, we adopt fuzzy-set qualitative comparative analysis (fsQCA) to study the combined effects of strategic control, operational control, institutional distance, cultural distance, relative capacity and business relatedness on the cross-border acquisition performance.FindingsOn the basis of fuzzy set analysis of multiple interdependent factors, we identify six configurations that are conductive to achieving high cross-border acquisition performance and two configurations that relate to the absence of high performance, thus shedding light on the casually complex nature of performance drivers of acquisitions.Originality/valueThis study provides a holistic, configurational approach to investigating cross-border acquisition performance by emerging market firms. Our results provide some compelling evidence that accounts for the causal complexity of post-acquisition control strategies and acquisition outcomes in the context of emerging economies.

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A Conceptual Model of Cultural Distance, MNC Subsidiary Roles, and Knowledge Transfer in China-based Subsidiaries

Organizations and Markets in Emerging Economies ◽

10.15388/omee.2011.2.2.14279 ◽

2011 ◽

Vol 2 (2) ◽

pp. 8-27 ◽

Cited By ~ 5

Author(s):

Cindy Qin ◽

Prem Ramburuth ◽

Yue Wang

Keyword(s):

Knowledge Transfer ◽

Strategic Management ◽

Conceptual Model ◽

Cultural Distance ◽

Future Research ◽

Cultural Management ◽

Mnc Subsidiary ◽

Cross Cultural Management ◽

Strategic Context ◽

The Impact

This conceptual paper seeks to review the literature on international strategic management, examine the trilateral interactive relations among national culture, subsidiary strategic context and knowledge transfer between China-based subsidiaries and their headquarters. Based on the Resource-Based View (RBV), cross-cultural management theories and other studies of international strategic management, we propose a conceptual model for understanding the interaction between cultural distance and subsidiary strategic context in the knowledge transfer process within MNCs, and ultimately the impact on the performance of subsidiaries. Drawing foundational support from this new model, we explore implications for future research.

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Do frequent acquirers outperform in cross-border acquisitions? A study of Indian companies

Review of International Business and Strategy ◽

10.1108/ribs-12-2019-0160 ◽

2020 ◽

Vol 30 (4) ◽

pp. 491-514

Author(s):

Samta Jain ◽

Smita Kashiramka ◽

P.K. Jain

Keyword(s):

Operating Performance ◽

Financial Statements ◽

Acquisition Performance ◽

Content Type ◽

Acquisition Period ◽

Cross Border ◽

Acquiring Firms ◽

The Impact ◽

First Time

Purpose The purpose of this paper is to examine the impact of cross-border acquisitions (CBAs) on the financial and operating performance of acquiring firms from emerging economies in the long-term; the acquiring firms have been segregated into frequent (multiple) and first-time (single) acquirers based on their prior cross-border experience. The intent is to identify if overseas activities bring over and above advantage to multiple acquirers in terms of enhanced financial synergies and reduced costs, motivating them to engage in sequential international transactions. Design/methodology/approach The paper analyses the impact of CBAs announced and completed during 2004–2013 by Indian companies listed on the NIFTY 500 index. The post-acquisition financial and operating performance of Indian cross-border acquirers has been compared with their pre-acquisition performance. The average performance over three-years immediately preceding the acquisition year constitutes the benchmark for the post-acquisition performance. The post-acquisition period includes a year of integration followed by three successive post-integration years. Therefore, in operational terms, the research period extends from 2001–2017. The long-term performance of frequent (multiple) and first-time (single) Indian acquirers has been investigated comprehensively using a set of 16 financial ratios. The performance has been assessed using the secondary data collected from financial statements of acquiring companies; the financial statements and the list of CBAs by Indian companies have been obtained from Thomson Reuter’s EIKON database. Findings The financial and operating performance of frequent as well as first-time acquirers have depicted a similarly deteriorating trend during the post-acquisition period. These findings indicate that the international expansion of Indian companies is not guided by synergy creation potential and may be pushed by the overconfidence or over-optimism and agency conflicts of managers. This, perhaps, indicates that firms are being imprudent in investing free cash flows available with them. Originality/value The study is the first of its kind. No study, to the best of the authors’ knowledge, has analysed the performance of acquiring firms by segregating them into frequent and first-time acquirers using accounting measures of performance. More so, an extensive analysis of the long-term financial and operating performance of acquiring companies is rare to come across in the extant literature.

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Cultural distance and cross-border diffusion of innovation: a literature review

Academia Revista Latinoamericana de Administración ◽

10.1108/arla-10-2018-0239 ◽

2020 ◽

Vol 33 (2) ◽

pp. 241-260

Author(s):

Huimin Zhang ◽

Mu Tian ◽

Tsang Kai Hung

Keyword(s):

Systematic Review ◽

Literature Review ◽

Diffusion Of Innovation ◽

International Business ◽

Cultural Distance ◽

New Products ◽

Content Type ◽

Cross Border ◽

The Individual ◽

The Impact

PurposeThe objective of this study is to advance the understanding of the connection between cultural distance and the cross-border diffusion of innovations by conducting a systematic review and analysis of previous literature.Design/methodology/approachThis study involved a literature review. A total of 35 articles published in ABS journals were identified from key management, international business and marketing journals. The articles were analyzed by the methodologies and findings presented.FindingsThe literature review shows that the adoption and diffusion of innovation and new products are bound to be deeply influenced by cultural distance. Specifically, national cultures influence the willingness of consumers to buy new products at both the individual and organizational levels; organizational culture plays a key role in the process of launching new products and diffusing innovations to the market. However, existing studies and their findings are fragmented and inconsistent. Controversial views remain regarding the impact of national cultural dimensions on the diffusion of innovation at the individual and organizational levels.Originality/valueThis is the first systematic review of the literature specifically focusing on the impact of cultural distance on the cross-border diffusion of innovation. In identifying the research gaps and limitations of extant studies, the authors point to avenues for future research to develop a more integrated research agenda for marketing, management and international business research.

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Transferring Knowledge through Cross-Border Communities of Practice

Organizational Knowledge Facilitation through Communities of Practice in Emerging Markets - Advances in Knowledge Acquisition, Transfer, and Management ◽

10.4018/978-1-5225-0013-1.ch001 ◽

2016 ◽

pp. 1-30 ◽

Cited By ~ 1

Author(s):

Rossella Canestrino ◽

Pierpaolo Magliocca

Keyword(s):

Knowledge Transfer ◽

Communities Of Practice ◽

Developed Countries ◽

Emerging Countries ◽

Economic Environment ◽

International Level ◽

Multicultural Teams ◽

Cross Border ◽

Border Communities ◽

The Impact

The aim of this chapter is to explore the use of Cross –Border Communities of Practice (CCoP) as way for managing knowledge in a global socio-economic environment, mainly referring to the rising economies. In doing so, some important issues related to cross-border knowledge transfer have been investigated, taking into account the impact that cultural diversities have on individuals' propensity to cooperate, as well as on their attitude to transfer and to share knowledge. The Authors explain the role that Global Managers have as “cultural bridges” in multicultural teams, thus enabling the last ones' transformation into a CCoP. With reference to both the opportunities and challenges that characterize the rising economies, CCoP arises as the best suitable way to transfer knowledge at international level, when firms from developed countries encounter firms from emerging countries.

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Experiential learning for Chinese companies to complete cross-border acquisitions: the case of Chinese acquirers

International Journal of Emerging Markets ◽

10.1108/ijoem-12-2018-0663 ◽

2020 ◽

Vol ahead-of-print (ahead-of-print) ◽

Cited By ~ 2

Author(s):

Le Wang ◽

Lars Schweizer ◽

Björn Michaelis

Keyword(s):

Knowledge Transfer ◽

Experiential Learning ◽

Cultural Distance ◽

Binary Logistic Regression ◽

Binary Logistic Regression Model ◽

Content Type ◽

Fine Grained ◽

Cross Border ◽

Foreign Acquisition ◽

Chinese Companies

PurposeIn a contribution to the emerging research examining Chinese cross-border acquisitions (CBAs), the authors observe experiential learning applications for enhancing M&A completions. By emphasizing knowledge transfer, the authors reveal how target-to-target industry similarity and bidder-to-target cultural distance affect learning outcomes.Design/methodology/approachUsing a binary logistic regression model, the authors examine a sample of CBA attempts announced by Chinese companies from January 2002 to December 2012 to identify the variables that affect the completion of CBAs.FindingsThe authors find that foreign acquisition experience but not domestic acquisition experience enhances subsequent acquisition attempts, especially when prior and focal target companies share the dominant industrial logic. Learning transfer is negatively affected when target countries are more culturally distant from China, but learning benefits appear to increase under strong bidder-to-target cultural distance.Originality/valueBy investigating learning in the precompletion stage in Chinese outward CBAs, the authors complement research that uses postacquisition performance to assess learning. The authors’ more fine-grained characterization reveals that acquisition experience increases knowledge transfer through experiential learning. Furthermore, the authors show that dominant industrial logic and cultural distance are underexplored contextual conditions, although they interact with foreign and domestic experience to affect the completion of CBAs.

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