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Cultural heterogeneity, acquisition experience and the performance of Chinese cross-border acquisitions

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  • Lili Kang
  • Fei Peng
  • Sajid Anwar

Abstract

Using data over the 2010-2015 period, we investigate the effect of cultural heterogeneity and cross-border acquisition experience on post-acquisition performance of Chinese publicly listed companies (PLCs). We find that between and within cultural heterogeneity has a negative and statistically significant effect on post-acquisition performance, but the effect of acquisition experience on post-acquisition performance is positive. We find that the dynamic marginal effects of cultural heterogeneity and acquisition experience on post-acquisition performance of Chinese PLCs are contingent on the scale of acquisition. Chinese PLCs can improve their post-acquisition performance by overcoming the issues arising from cultural heterogeneity, accumulating acquisition experience, and exploiting economies of scale. However, in the case of state-owned PLCs, prior cross-border acquisition experience can adversely affect the performance of new cross-border acquisitions.

Suggested Citation

  • Lili Kang & Fei Peng & Sajid Anwar, 2023. "Cultural heterogeneity, acquisition experience and the performance of Chinese cross-border acquisitions," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 28(2), pages 738-765, April.
    • Handle: RePEc:taf:rjapxx:v:28:y:2023:i:2:p:738-765
    DOI: 10.1080/13547860.2021.1950112
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