National culture compatibility and merger and acquisition performance.
Item
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Title
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National culture compatibility and merger and acquisition performance.
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Identifier
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AAI3187411
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identifier
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3187411
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Creator
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Nicolopoulos, Vasiliki.
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Contributor
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Adviser: Harold Goldstein
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Date
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2005
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Language
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English
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Publisher
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City University of New York.
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Subject
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Psychology, Industrial
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Abstract
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Recent research has identified culture clash as one of the main reasons for the high failure rate of mergers and acquisitions (M&A). However, despite the increased rate at which companies worldwide are engaging in cross-border M&A, very few studies have attempted to isolate the effects of national culture on M&A performance. The current study used an archival research methodology to examine national culture sources of variance in M&A completion and financial performance. Specifically, a total of 204 cross-border M&A between the years of 1984 and 2004 were investigated. National culture differences were tapped using data from project GLOBE to assess the degree to which U.S. based cross-border M&A varied on the dimensions of power distance, uncertainty avoidance, institutional collectivism, in-group collectivism, assertiveness, future orientation, and performance orientation. It was hypothesized that national culture differences between the combining firms on each of the culture dimensions investigated would be related to M&A completion. This set of hypotheses was not supported by the current study. It was also hypothesized national culture differences between the combining firms on each of the societal dimensions of culture would be related to the financial performance of the M&A (i.e., increase in Return on Assets and average stock price fluctuations). This set of hypotheses received partial support from the results of the current study. Specifically, culture differences were not found to be related to financial performance for either of the long-term measures of financial performance (i.e., ROA three years post M&A and stock price fluctuations two and three years later). However, an increase in culture differences for the societal culture dimensions of uncertainty avoidance values, institutional collectivism values, and power distance practices were found to significantly predict variation in market adjusted returns for the three days surrounding the announcement of the M&A and the first year after M&A completion. Finally, the role of national culture differences on M&A performance was found to be moderated by the macro industry (i.e., services versus manufacturing) in which the M&A were based for the societal culture dimensions of power distance and uncertainty avoidance practices, and institutional collectivism, assertiveness, and performance orientation values.
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Type
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dissertation
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Source
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PQT Legacy CUNY.xlsx
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degree
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Ph.D.
