The Role of Country-Level Differences in Influencing ASEAN Firms’ Cross-Border Mergers and Acquisitions (CBMAs) Success
DOI:
https://doi.org/10.66674/px15k911Keywords:
CBMAs, CBMA success, cultural distance, geographic distance, level of economic developmentAbstract
The preference of using CBMAs as an external growth strategy spurs the interest to examining whether or not the CBMA transaction creates value that leads to a CBMA success. The decreasing trend of completed CBMA and non-value creation indicated that CBMA is a riskier transaction compared to the domestic M&As, which might be due to the risks related to cross-border transactions. Thus, this study explores the effect of the cultural distance, geographic distance, and the level of economic development in the ASEAN CBMA success. A total of 348 CBMA transactions involving the ASEAN bidder and 246 CBMA transactions involving the ASEAN target, announced and completed during the year 2002 to 2013, were analysed. Consistent with the social identity theory, a large cultural distance (power distance dimension) between the target and bidding country could adversely affect the CBMA success of ASEAN firms. Meanwhile, the geographic distance has no significant effect on the ASEAN CBMA success. The different level of economic development between the target and bidder also has a negative effect on the ASEAN CBMA success, contradicting the resourcebased view theory
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Copyright (c) 2018 Nurhazrina Mat Rahim, Ruhani Hj. Ali (Author)
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Authors retain copyright and grant Capital Markets Review the right of first publication. Articles are published under the Creative Commons Attribution 4.0 International (CC BY 4.0) licence: https://creativecommons.org/licenses/by/4.0/. This licence permits sharing and adaptation for any purpose, including commercial use, provided appropriate credit is given, a link to the licence is supplied and any changes are indicated. Third-party material excluded from the article's licence must be clearly identified, and authors are responsible for obtaining any required permission.
