Cross-Border Acquisitions and the Asymmetric Effect of Power Distance Value Difference on Long-Term Post-Acquisition Performance

Strategic Management Journal, Forthcoming

40 Pages Posted: 3 Apr 2016 Last revised: 23 May 2016

See all articles by Zhi Huang

Zhi Huang

University of Kentucky - Gatton College of Business and Economics

Hong Zhu

Peking University - HSBC School of Business

Daniel Brass

University of Kentucky - Gatton College of Business and Economics

Date Written: April 1, 2016

Abstract

Inconclusive findings about the effect of national cultural differences on post-acquisition performance may be created by the failure to distinguish among the different cultural dimensions and the asymmetry of cultural differences. To demonstrate a different approach, this study focuses on one dimension of national cultural values — power distance value (PDV) and develops a framework for the asymmetric effect of PDV differences in creating two types of conflicts. The analysis of 2,115 cross-border acquisitions in the global information technology industry shows that PDV differences undermine the long-term post-acquisition performance of acquirers. This effect is stronger when acquirers are higher than targets in PDV than when the opposite is the case. This asymmetric effect of PDV difference depends on national status difference, business relatedness, and acquisition experience.

Keywords: acquisition, national culture, power distance value, status, post-acquisition performance

Suggested Citation

Huang, Zhi and Zhu, Hong and Brass, Daniel, Cross-Border Acquisitions and the Asymmetric Effect of Power Distance Value Difference on Long-Term Post-Acquisition Performance (April 1, 2016). Strategic Management Journal, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2757860

Zhi Huang (Contact Author)

University of Kentucky - Gatton College of Business and Economics ( email )

550 South Limestone
Lexington, KY 40506
United States

Hong Zhu

Peking University - HSBC School of Business ( email )

University Town
Nanshan District
Shenzhen, Guang Dong 518055
China

Daniel Brass

University of Kentucky - Gatton College of Business and Economics ( email )

Dept. of Management
Lexington, KY 40506
United States
859-257-4260 (Phone)
859-257-3577 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
193
Abstract Views
957
rank
195,368
PlumX Metrics