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Unveiling the influence of host-country religiosity on the completion of cross-border merger and acquisition deals

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  • Zuo, Zhigang
  • Zheng, Wenquan
  • Wang, Chengqi
  • Su, Jiaoyue
  • Desai, Malay N.

Abstract

While international business (IB) literature highlights the impact of religious distance on cross-border mergers and acquisitions (CBMAs), limited research has examined how host-country religiosity, defined as the popularity and devoutness of religious beliefs, affects the completion of inward CBMA deals. Using a propensity score matching (PSM) approach and analyzing 4290 CBMA transactions across 105 host countries from 1999 to 2019, we find that higher levels of host-country religiosity reduce the likelihood of CBMA deal completion, independent of religious distance. We further identify increased distrust toward foreign acquirers as a key mediating mechanism. However, a stage-by-stage acquisition strategy, rather than a one-off, full-control approach, mitigates the negative impact of religiosity on deal completion. Our findings contribute to CBMA research by positioning host-country religiosity as a critical determinant of deal outcomes, revealing social trust as a mediating factor, and highlighting the moderating role of acquisition structuring.

Suggested Citation

  • Zuo, Zhigang & Zheng, Wenquan & Wang, Chengqi & Su, Jiaoyue & Desai, Malay N., 2025. "Unveiling the influence of host-country religiosity on the completion of cross-border merger and acquisition deals," International Business Review, Elsevier, vol. 34(5).
    • Handle: RePEc:eee:iburev:v:34:y:2025:i:5:s0969593125000964
    DOI: 10.1016/j.ibusrev.2025.102483
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