Gender culture and cross-border mergers and acquisitions: The deals with RCEP targets

The initiation of RCEP (Regional Comprehensive Economic Partnership) provides a natural experiment to examine the impact of gender culture induced by women's empowerment on cross-border mergers and acquisitions (CBM&As). Using a sample of 2345 CBM&As with targets in RCEP countries from 1995 to 2019, this study finds that acquirers from countries with higher women's empowerment are less likely to target firms in ASEAN (Association of Southeast Asian Nations) countries than firms in other RCEP countries. Meanwhile, gender culture induced by women's empowerment can only positively affect deal completion for RCEP acquirers. Consistent with the prediction based on women's social preference, acquirers in high-women-empowerment countries experience positive announcement returns but negative returns in the long run, especially when they bid on an ASEAN target. We find that such an effect of gender culture on M&A performance is associated with lower premiums, lower post-merger uncertainty, and higher implicit costs. Although acquirers in high-women-empowerment countries would pay a lower premium and experience less uncertainty for ASEAN acquisitions, their social concern induced by gender culture increases their post-merger operating costs.