Uncertainty avoidance, risk tolerance and corporate takeover decisions

Frijns, Bart; Gilbert, Aaron; Lehnert, Thorsten; Tourani‐Rad, Alireza

doi:10.1016/j.jbankfin.2013.02.010

Cited by 157 publications

(81 citation statements)

References 40 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…UA of target firm also affects the postacquisition integration strategy opted by the acquirer in CBA (Morosini & Singh, 1994). A recent study done by Frijns et al (2013) has found that managers from high UA countries have higher tolerance toward risky decisions such as CBAs. They try to mitigate these risks by lowering the premium paid to the target firm or by lowering their equity stake in the merged entity (Bremer et al, 2015).…”

Section: Ua Of Acquirers and Imitation Of Payment Modementioning

confidence: 99%

“…In international business literature, UA is one of the most commonly used cultural attribute (Rapp, Bernardi, & Bosco, 2011). CEOs from high uncertainty avoiding countries are less risk tolerant, and hence reluctant to go for cross-border acquisitions as they seek higher returns for these deals (Frijns, Gilbert, Lehnert, & Tourani-Rad, 2013).…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Interorganizational imitation and payment mode decisions in cross‐border acquisitions

Chhabra

Popli

2018

Strategic Change

View full text Add to dashboard Cite

Acquiring firm imitates the payment method decisions made by prior foreign acquirers targeting the same host country in cross-border acquisitions. Information asymmetry and bounded rationality induces acquirers to imitate the decisions of other foreign firms in the similar context.Mimetic behavior of the firms is more salient when the acquiring firm belongs to a country with high uncertainty avoidance cultural attribute and when institutional uncertainty is high in host country. The hypotheses are tested using binary logistic regression on a dataset of 1,136 crossborder acquisitions done by a group of seven countries during 2000-2010.

show abstract

Section: Ua Of Acquirers and Imitation Of Payment Modementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Interorganizational imitation and payment mode decisions in cross‐border acquisitions

Chhabra

Popli

2018

Strategic Change

View full text Add to dashboard Cite

show abstract

“…A substantial body of literature indicates that national culture influences human values [Hofstede et al, 2010;Breuer, Quinten, 2009] and economic outcomes [Guiso et.al., 2006;Siegel et al, 2011;Zheng et al, 2012;Frijns et al, 2013;Braginsky, Mityakov, 2015]. Zingales [2015] argues that in the last ten years there has been an explosion of economic research on culture, which originates from the failure of traditional economic models to explain the reality of "homo economicus" embedded in a cultural context.…”

Section: Study 1: Anchoring and Overconfidence In A Cultural Dimensionmentioning

confidence: 99%

Anchoring and Overconfidence: The Influence of Culture and Cognitive Abilities

Czerwonka

2017

International Journal of Management and Economics

View full text Add to dashboard Cite

Anchoring and overconfidence are some of the best-known biases in psychology and behavioral finance literature. While a number of studies have investigated the evidence of these biases and explored the motives and human factors that contribute to the one's susceptibility to the effects, little is known about the cultural factors behind these heuristic biases. This paper aims to fill the research gap and shows the differences in proneness to the anchoring effect and overconfidence in two samples of students from Poland and India. The purpose of the study is twofold: to analyze susceptibility to behavioral effects relative to cultural background; and to consider the subjects' cognitive abilities as a potential factor in their exposure to behavioral biases and confirm that subjects with higher cognitive skills, measured by the cognitive reflection test (CRT) display less susceptibility to the above heuristic biases.

show abstract

“…The impact of informal institutions (societal norms and cultures) has been largely ignored and has been only recently assessed by Papanastasopoulos (2014) with emphasis on individualism and uncertainty avoidance. We need to stress here, that a recent but growing literature (Aggarwal & Goodell, 2009Aggarwal, Kearney, & Lucey, 2012;Forner & Sanabria, 2010;Frijns, Gilbert, Lehnert, & Tourani-Rad, 2013;Siegel, Licht, & Schwartz, 2011) clearly suggests that societal norms and cultural dimensions could significantly affect actions and observed outcomes in accounting, economics and finance. 2 We differentiate our study with prior research, by focusing on trust, which has been shown to affect economic growth, capital market development, government regulation, international trade, stock market participation and hiring money managers within a country (Gennaioli, Shleifer, & Vishny, 2015;Guiso, Sapienza, & Zingales, 2006Knack & Keefer, 1997;Stulz & Williamson, 2003).…”

Section: Introductionmentioning

confidence: 98%