Probing the effects of cultural and psychic distance on M&A performance: the case of multilatinas' cross-border acquisitions

Abstract

Cross-border acquisitions (CBAs) have extensively been used by Multilatinas as a preferred entry mode in foreign markets, quickly providing access to resources, competencies and local intelligence without the burden of starting up a greenfield investment and bearing its associated risk to face the liability of foreignness. Using fixed-effects, generalized least square (FEGLS) regressions applied on a panel data sample of 602 CBA deals announced during the 1989-2011 period by 182 Multilatinas competing in 74 industries and headquartered in Argentina, Brazil, Chile, Colombia, Mexico, Peru and Venezuela, the impact of cultural and psychic distances (as perceived by investors) on the performance of these CBA deals (measured by acquirers' shareholders' short term announcement returns) was evaluated. Key emerging conclusions are that: a) the national cultural distance composite index, based on Hofstede's four dimensions seems to better predict investors' reaction to CBA announcements in comparison with the other "psychic" distance concepts, such as the administrative and geographical distances between home and host countries; b) investors' perceptions regarding the cultural dissimilarities between these countries are factored in their response as an anticipation of the expected difficulties that acquiring firms' will have during the post-merger integration process, as predicted by the several theoretical streams that focus on the role of culture in M&A; c) due to the positive and significant moderating effect of the uncertainty avoidance dimension, investors seem also to perceive that acquirers from home countries characterized by high uncertainty avoidance scores will be able to better handle the challenges that they will face in the post-merger integration stage, to the extent that these firms, as recognized in the cross-cultural research literature, have been associated with a preference for organizational rules and procedures that increase the chances of a successful completion of the merger or acquisition deal; d) although its role is recognized in the crosscultural literature, power distance levels have no significant moderating effect on the cultural distance-M&A performance relationship. The models are robust to varying lengths of event windows and to alternative measurements of cultural distance, such as those based on the framework developed by the GLOBE project (House, Hanges, Javidan, Dorfman, & Gupta, 2004) and on the country cultural cluster maps proposed by Ronen and Shenkar (2013). Limitations of this study are pointed out and future research directions are suggested in order to advance our knowledge and understanding of the antecedents of the performance of the cross-border acquisitions made by Multilatinas.

Avaliação do papel das agências de promoção de exportação e investimento nos fluxos de negócios entre países

“…Estudos de comparações transnacionais estão preocupados com como a cultura de um país influencia os negócios internacionais, ou seja, a ligação entre a cultura e o comportamento ou atitudes de indivíduos e grupos em organizações ou o comportamento das organizações como entidades. Sob a suposição de que as fronteiras culturais foram assumidas para coincidir com as fronteiras nacionais, a identidade nacional (e, portanto, cultural) foi admitida como uma dada característica única e imutável de um indivíduo (Dakessian, 2014).…”

“…as preferências para o licenciamento de investimentos diretos no exterior (Shane, 1992), o efeito da distância cultural sobre o desempenho da empresa (Gomez-Mejia & Palich, 1997), e na investigação dos efeitos da distância cultural sobre o desempenho de fusões e aquisições (Dakessian & Feldmann, 2013;Dakessian, 2014;Morosini, Shane, & Singh, 1998;Slangen, 2006;Weber, Shenkar, & Raveh, 1996). (Magnusson, Wilson, Zdravkovic, Zhou, & Westjohn, 2008;Uhlenbruck, 2004).…”

“…O questionário foi aplicado a gerentes de nível médio em várias organizações, concorrentes em serviços financeiros, processamento de alimentos e indústrias de telecomunicações e localizadas em 58 países. As respostas foram analisadas por procedimentos psicométricos convencionais, tais como análise de itens, análise fatorial, análise de cluster e análise de generalização (House et al, 2004;Magnusson et al, 2008;Dakessian, 2014 (Brewer, 2007;Evans & Mavondo, 2002;O 'Grady & Lane, 1996) (Håkanson & Ambos, 2010).…”

“…Enquanto a distância cultural é um fenômeno coletivo relacionado a diferenças nacionais em normas e valores compartilhados (Drogendijk & Slangen, 2006;Hofstede, 1980Hofstede, , 1997 (Boyacigiller, 1990;Dakessian, 2014). Não obstante o fato de que o indivíduo é a unidade de análise apropriada quando se mede a distância psíquica, as medidas nacionais de distância psíquica devem ser entendidas como a distância psíquica média realizada pela comunidade empresarial de um país estrangeiro particular (Dow & Karunaratna, 2006;Håkanson & Ambos, 2010;Smith et al, 2011…”