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Language and cross-border acquisitions: An exploratory study

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  • Kedia, Ben L.
  • Reddy, Rama Krishna

Abstract

The aim of this study is to examine the effects of language on post-acquisition performance of US based cross-border acquisitions. In this study we attempt to show that post-acquisition performance is explained by the linguistic distance between the acquirer and target country of the acquisition. In addition, this study explains the moderating role of acquisition experience in the linguistic distance-acquisition performance relationship. An analysis of 1120 US acquisitions in 33 target countries over a period of 6 years (2007 to 2012) demonstrates that linguistic distance has explanatory value in post-acquisition performance. Our analysis also demonstrates that the acquirer’s cross-border acquisition experience plays a significant role as a moderator of this linguistic distance—acquisition performance relationship. In addition, our analysis of lingua franca proficiency also lends support to our hypothesized relationships and demonstrates the robustness of our findings.

Suggested Citation

  • Kedia, Ben L. & Reddy, Rama Krishna, 2016. "Language and cross-border acquisitions: An exploratory study," International Business Review, Elsevier, vol. 25(6), pages 1321-1332.
  • Handle: RePEc:eee:iburev:v:25:y:2016:i:6:p:1321-1332
    DOI: 10.1016/j.ibusrev.2016.04.004
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    Cited by:

    1. Ashish Malik & Ralf Bebenroth, 2017. "Mind Your Language! : Role of Target Firm Language in Post-Merger Integration," Discussion Paper Series DP2017-15, Research Institute for Economics & Business Administration, Kobe University.
    2. Tenzer, Helene & Terjesen, Siri & Harzing, Anne-wil, 2017. "Language in international business : A review and agenda for future research," Other publications TiSEM 8afd108a-9666-4fbb-934f-6, Tilburg University, School of Economics and Management.
    3. repec:spr:manint:v:57:y:2017:i:6:d:10.1007_s11575-017-0319-x is not listed on IDEAS

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