IDEAS home Printed from https://ideas.repec.org/a/sae/sagope/v9y2019i2p2158244019845180.html
   My bibliography  Save this article

Soft Issues During Cross-Border Mergers and Acquisitions and Industry Performance, China–Pakistan Economic Corridor Based View

Author

Listed:
  • Muhammad Waseem Bari
  • Muhammad Abrar
  • Mohsin Bashir
  • Sajjad Ahmad Baig
  • Meng Fanchen

Abstract

China–Pakistan Economic Corridor (CPEC) has got a vital position in the perspectives of economic growth and sustainable development of China and Pakistan. Viewing these prospects, the Chinese organizations are taking interest to deal with Pakistani organizations for the reinforcement of the mergers and acquisitions (M&As) deals. But, soft issues (SIs), such as, differences in organizational and national cultures, leadership styles, and human resource (HR) practices, may arise between Sino–Pak business entities which may hamper the successful dealings of M&As. This research investigates the effects of SIs on knowledge and technology sharing and transfer (KTST) and firm performance (FP), leading to industry performance (IP), and KTST effect on FP. Drawing on social exchange theory, psychological contract development and maintenance (PCDM) is investigated as a moderator in this study. The convenience sampling technique and administrative survey approach are applied for data collection. The 550 questionnaires were distributed among the Chinese and Pakistani workers. However, only 435 respondents gave proper feedback. Partial least square, structural equation modeling (PLS-SEM), a statistical model through smart PLS-3 is applied to analyze the data. The results elucidate the negative impacts of SIs on KTST and FP while KTST affects positively on FP and FP positively affects IP. The PCDM significantly moderates the effects of SIs on KTST and FP. If the Chinese organizations concentrate upon PCDM, the SIs would be resolved. The productive deals of M&As would be helpful in underpinning the exclusive growth of CPEC projects. The implications and limitations are discussed at the end of this study.

Suggested Citation

  • Muhammad Waseem Bari & Muhammad Abrar & Mohsin Bashir & Sajjad Ahmad Baig & Meng Fanchen, 2019. "Soft Issues During Cross-Border Mergers and Acquisitions and Industry Performance, China–Pakistan Economic Corridor Based View," SAGE Open, , vol. 9(2), pages 21582440198, April.
    • Handle: RePEc:sae:sagope:v:9:y:2019:i:2:p:2158244019845180
    DOI: 10.1177/2158244019845180
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/2158244019845180
    Download Restriction: no
    File URL: https://libkey.io/10.1177/2158244019845180?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Riikka M Sarala & Eero Vaara, 2010. "Cultural differences, convergence, and crossvergence as explanations of knowledge transfer in international acquisitions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(8), pages 1365-1390, October.
    2. Nancy K. Napier, 1989. "Mergers and Acquisitions, Human Resource Issues and Outcomes: A Review and Suggested Typology," Journal of Management Studies, Wiley Blackwell, vol. 26(3), pages 271-290, May.
    3. Gunkel, Marjaana & Schlaegel, Christopher & Rossteutscher, Tobias & Wolff, Birgitta, 2015. "The human aspect of cross-border acquisition outcomes: The role of management practices, employee emotions, and national culture," International Business Review, Elsevier, vol. 24(3), pages 394-408.
    4. John F. Veiga & Michael Lubatkin & Roland Calori & Philippe Véry, 2000. "Measuring organizational culture: A two nation post-hoc analysis of a cultural compatibility index," Post-Print hal-02311644, HAL.
    5. Julian Birkinshaw & Henrik Bresman & Robert Nobel, 2010. "Knowledge transfer in international acquisitions: A retrospective," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(1), pages 21-26, January.
    6. 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.
    7. Sarstedt, Marko & Ringle, Christian M. & Smith, Donna & Reams, Russell & Hair, Joseph F., 2014. "Partial least squares structural equation modeling (PLS-SEM): A useful tool for family business researchers," Journal of Family Business Strategy, Elsevier, vol. 5(1), pages 105-115.
    8. Doris Gomezelj Omerzel & Rune Ellemose Gulev, 2011. "Knowledge Resources and Competitive Advantage," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 9(4 (Winter), pages 335-354.
    9. Riikka M. Sarala & Eero Vaara, 2010. "Cultural differences, convergence, and crossvergence as explanations of knowledge transfer in international acquisitions," Post-Print hal-02312553, HAL.
    10. Stephan Bergamin & Markus Braun, 2018. "Mergers and Acquisitions," Management for Professionals, Springer, number 978-3-319-60504-3, December.
    11. Deepak K. Datta, 1991. "Organizational fit and acquisition performance: Effects of post‐acquisition integration," Strategic Management Journal, Wiley Blackwell, vol. 12(4), pages 281-297, May.
    12. Henrik Bresman & Julian Birkinshaw & Robert Nobel, 2010. "Knowledge transfer in international acquisitions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(1), pages 5-20, January.
    13. Stephan Bergamin & Markus Braun, 2018. "Integration Management in Mergers and Acquisitions: Success Factors and Pitfalls," Management for Professionals, in: Mergers and Acquisitions, chapter 1, pages 1-31, Springer.
    14. Ahammad, Mohammad Faisal & Tarba, Shlomo Yedidia & Liu, Yipeng & Glaister, Keith W., 2016. "Knowledge transfer and cross-border acquisition performance: The impact of cultural distance and employee retention," International Business Review, Elsevier, vol. 25(1), pages 66-75.
    15. Sinkovics, Rudolf R. & Zagelmeyer, Stefan & Kusstatscher, Verena, 2011. "Between merger and syndrome: The intermediary role of emotions in four cross-border M&As," International Business Review, Elsevier, vol. 20(1), pages 27-47, February.
    16. Yaakov Weber & Oded Shenkar & Adi Raveh, 1996. "National and Corporate Cultural Fit in Mergers/Acquisitions: An Exploratory Study," Management Science, INFORMS, vol. 42(8), pages 1215-1227, August.
    17. Lin, Hai-Fen & Su, Jing-Qin & Higgins, Angela, 2016. "How dynamic capabilities affect adoption of management innovations," Journal of Business Research, Elsevier, vol. 69(2), pages 862-876.
    18. Hou, Rui & Yang, Jianmei & Yao, Canzhong & McKelvey, Bill, 2015. "How does competition structure affect industry merger waves? A network analysis perspective," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 429(C), pages 140-156.
    19. Frédérique Six, 2007. "Building interpersonal trust within organizations: a relational signalling perspective," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 11(3), pages 285-309, September.
    20. Faure, Guy Olivier & Fang, Tony, 2008. "Changing Chinese values: Keeping up with paradoxes," International Business Review, Elsevier, vol. 17(2), pages 194-207, April.
    21. Kevin Zheng Zhou & Caroline Bingxin Li, 2012. "How knowledge affects radical innovation: Knowledge base, market knowledge acquisition, and internal knowledge sharing," Strategic Management Journal, Wiley Blackwell, vol. 33(9), pages 1090-1102, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alam, Faizan & Tao, Meng & Rastogi, Rashmi & Mendiratta, Aparna & Attri, Rekha, 2024. "Do social media influencers influence the vaccination drive? An application of source credibility theory and uses and gratification theory," Technological Forecasting and Social Change, Elsevier, vol. 198(C).
    2. Sait Revda Dinibutun & Cemil Kuzey & Muhammet Sait Dinc, 2020. "The Effect of Organizational Climate on Faculty Burnout at State and Private Universities: A Comparative Analysis," SAGE Open, , vol. 10(4), pages 21582440209, December.
    3. Yuanyuan Luo & Da Ren, 2021. "Influence of the enterprise’s intelligent performance evaluation model using neural network and genetic algorithm on the performance compensation of the merger and acquisition parties in the commitmen," PLOS ONE, Public Library of Science, vol. 16(3), pages 1-16, March.
    4. Muhammad Waseem Bari & Muhammad Abrar & Sadia Shaheen & Mohsin Bashir & Meng Fanchen, 2019. "Knowledge Hiding Behaviors and Team Creativity: The Contingent Role of Perceived Mastery Motivational Climate," SAGE Open, , vol. 9(3), pages 21582440198, September.
    5. Elena Meliá-Martí & Natalia Lajara-Camilleri & Ana Martínez-García & Juan F. Juliá-Igual, 2021. "Why Do Agricultural Cooperative Mergers Not Cross the Finishing Line?," Agriculture, MDPI, vol. 11(11), pages 1-19, November.
    6. Sana Mumtaz & Sadia Nadeem, 2022. "Understanding the Integration of Psychological and Socio-cultural Factors in Adjustment of Expatriates: An AUM Process Model," SAGE Open, , vol. 12(1), pages 21582440221, February.
    7. Mohsin Bashir & Ammarah Hameed & Muhammad Waseem Bari & Raza Ullah, 2021. "The Impact of Age-Diverse Workforce on Organization Performance: Mediating Role of Job Crafting," SAGE Open, , vol. 11(1), pages 21582440219, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ahammad, Mohammad Faisal & Tarba, Shlomo Yedidia & Liu, Yipeng & Glaister, Keith W., 2016. "Knowledge transfer and cross-border acquisition performance: The impact of cultural distance and employee retention," International Business Review, Elsevier, vol. 25(1), pages 66-75.
    2. Qi Ai & Hui Tan, 2018. "The intra-firm knowledge transfer in the outward M&A of EMNCs: Evidence from Chinese manufacturing firms," Asia Pacific Journal of Management, Springer, vol. 35(2), pages 399-425, June.
    3. Aslam, Muhammad Shakeel & O’Reilly, Dermot & Shah, Uzair, 2023. "Taking the rough with the smooth: A qualitative inquiry into social and cultural practices of knowledge-sharing work in international consultancy alliances," International Business Review, Elsevier, vol. 32(4).
    4. Degbey, William Y. & Pelto, Elina, 2021. "Customer knowledge sharing in cross-border mergers and acquisitions: The role of customer motivation and promise management," Journal of International Management, Elsevier, vol. 27(4).
    5. Wang, Daojuan & Hain, Daniel S. & Larimo, Jorma & Dao, Li T., 2020. "Cultural differences and synergy realization in cross-border acquisitions," International Business Review, Elsevier, vol. 29(3).
    6. Renneboog, Luc & Vansteenkiste, Cara, 2019. "Failure and success in mergers and acquisitions," Journal of Corporate Finance, Elsevier, vol. 58(C), pages 650-699.
    7. Durand, Muriel, 2016. "Employing critical incident technique as one way to display the hidden aspects of post-merger integration," International Business Review, Elsevier, vol. 25(1), pages 87-102.
    8. Hussain, Tanveer & Shams, Syed, 2022. "Pre-deal differences in corporate social responsibility and acquisition performance," International Review of Financial Analysis, Elsevier, vol. 81(C).
    9. Reynolds (née Schnurr), Noelia-Sarah & Teerikangas, Satu, 2016. "The international experience in domestic mergers – Are purely domestic M&A a myth?," International Business Review, Elsevier, vol. 25(1), pages 42-50.
    10. Marty Reilly & Esther Tippmann & Pamela Sharkey Scott, 2023. "Subsidiary closures and relocations in the multinational enterprise: Reinstating cooperation in subsidiaries to enable knowledge transfer," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(6), pages 997-1026, August.
    11. Alexandridis, George & Hoepner, Andreas G.F. & Huang, Zhenyi & Oikonomou, Ioannis, 2022. "Corporate social responsibility culture and international M&As," The British Accounting Review, Elsevier, vol. 54(1).
    12. Ho, Mia Hsiao-Wen & Wang, Fatima, 2015. "Unpacking knowledge transfer and learning paradoxes in international strategic alliances: Contextual differences matter," International Business Review, Elsevier, vol. 24(2), pages 287-297.
    13. Ai, Qi & Tan, Hui, 2020. "Uncovering neglected success factors in post-acquisition reverse capability transfer: Evidence from Chinese multinational corporations in Europe," Journal of World Business, Elsevier, vol. 55(3).
    14. Zahoor, Nadia & Khan, Zaheer & Sinkovics, Rudolf R., 2022. "The Role of Emotions in Cross-Border Mergers & Acquisitions: A Systematic Review of the Inter-Disciplinary Literature and Future Research Agenda," Journal of International Management, Elsevier, vol. 28(4).
    15. Ahammad, Mohammad Faisal & Tarba, Shlomo Y. & Liu, Yipeng & Glaister, Keith W. & Cooper, Cary L., 2016. "Exploring the factors influencing the negotiation process in cross-border M&A," International Business Review, Elsevier, vol. 25(2), pages 445-457.
    16. Popli, Manish & Akbar, Mohammad & Kumar, Vikas & Gaur, Ajai, 2016. "Reconceptualizing cultural distance: The role of cultural experience reserve in cross-border acquisitions," Journal of World Business, Elsevier, vol. 51(3), pages 404-412.
    17. Demetris Vrontis & Jaroslav Belas & Alkis Thrassou & Gabriele Santoro & Michael Christofi, 2023. "Strategic agility, openness and performance: a mixed method comparative analysis of firms operating in developed and emerging markets," Review of Managerial Science, Springer, vol. 17(4), pages 1365-1398, May.
    18. Satu Teerikangas & Olivier Irrmann, 2016. "Cultural Change Following International Acquisitions: Cohabiting the Tension Between Espoused and Practiced Cultures," Management International Review, Springer, vol. 56(2), pages 195-226, April.
    19. Navío-Marco, Julio & Solórzano-García, Marta & Matilla-García, Mariano & Urueña, Alberto, 2016. "Language as a key factor of long-term value creation in mergers and acquisitions in the telecommunications sector," Telecommunications Policy, Elsevier, vol. 40(10), pages 1052-1063.
    20. Zhou, Abby Jingzi & Fey, Carl & Yildiz, H. Emre, 2020. "Fostering integration through HRM practices: An empirical examination of absorptive capacity and knowledge transfer in cross-border M&As," Journal of World Business, Elsevier, vol. 55(2).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:sagope:v:9:y:2019:i:2:p:2158244019845180. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.