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The Role of Confucius Institutes and One Belt, One Road Initiatives on the Values of Cross-Border M&A: Empirical Evidence from China

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  • Jin-Young Jung

    (College of Business Administration, Inha University, Incheon 22212, Korea)

  • Wei Wang

    (College of Business Administration, Inha University, Incheon 22212, Korea)

  • Sung-Woo Cho

    (College of Computing, Sungkyunkwan University, Seoul 27125, Korea)

Abstract

This study examines how national cultural policies such as Confucius Institutes and One Belt, One Road initiatives (BRI) affect the post-acquisition returns of Chinese cross-border mergers and acquisitions based on data from a sample of 192 transactions covering 2011 to 2015. We find that the cultural export of Chinese Confucius Institutes and the BRI exert a significantly positive impact on long-term acquirer returns, while cultural/institutional distance exerts a negative impact. Further evidence shows that Confucius Institutes and BRI mitigate the negative effect of cultural distance between merging firms. These results offer the first evidence that national cultural translation has substantial impacts on the long-run acquirer financial performance of cross-border mergers that decrease cultural institutional heterogeneity between countries.

Suggested Citation

  • Jin-Young Jung & Wei Wang & Sung-Woo Cho, 2020. "The Role of Confucius Institutes and One Belt, One Road Initiatives on the Values of Cross-Border M&A: Empirical Evidence from China," Sustainability, MDPI, vol. 12(24), pages 1-20, December.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:24:p:10277-:d:459066
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    2. Shujuan Guo & Cuijie Diao & Gang Li & Katsuhiko Takahashi, 2021. "The Two-Echelon Dual-Channel Models for the Intermodal Container Terminals of the China Railway Express Considering Container Accumulation Modes," Sustainability, MDPI, vol. 13(5), pages 1-19, March.
    3. Keimetswe Lesego Alicia, 2021. "The Role of Confucius Institute in Shaping China’s National Image in Botswana: Case of CI Students," Social Change Review, Sciendo, vol. 19(1), pages 120-144, December.
    4. Sung-woo Cho & Jin-young Jung & Byoung-Jin Kim & Hyunjoo Song, 2022. "What Causes the M&A Performance of High-Tech Firms?," Sustainability, MDPI, vol. 14(5), pages 1-14, February.

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