Finding Unity in a Friendly Takeover

Harikkala-Laihinen, Riikka

doi:10.1007/978-3-030-60567-4_3

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Culture and Anchoring1

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2023

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“…This might be attributed to the multiple challenges in making a merger successful in the presence of different institutional environments and cultures (Aguilera & Dencker, 2004; Child et al, 2001; Kissin & Herrera, 1990). As noted by Harikkala‐Laihinen (2020), acquirers with a long‐term orientation are more likely to engage in friendly acquisitions, which can accelerate the target's integration into the acquirer's operations. We observe that 82% of the acquisitions completed by long‐term‐oriented acquirers are friendly compared to 77% for short‐term‐focused acquirers.…”

Section: Culture and Anchoringmentioning

confidence: 98%

Cultural, trust, and transparency effects on the use of anchoring in mergers and acquisitions

Ferris

Jayaraman

Liao

2023

J of Financial Research

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Although price anchoring is a global phenomenon, we find that country cultures, trust levels, and information/legal transparency affect its use in determining target offer prices. Price anchoring is associated with cultures that deemphasize long‐term orientation, uncertainty avoidance, and personal indulgence. Acquirers from countries with low levels of trust in people or the legal system are more likely to anchor their bids. Anchoring is more frequently observed in countries where information and legal transparency is poor. We find that the use of anchoring can result in reduced long‐term performance by acquirers.

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