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Cultural Friction and the Role of Effective Cultural Distance in Cross- border M&A Deal Abandonment

, Mohammad Akbar, Vikas Kumar
Published in Academy of Management
2017
Volume: 2014
   
Issue: 1
Abstract
Cultural distance is arguably the most widely used distance construct in international business. To extend and integrate the notion of cultural friction with literature on expatriate learning and organizational learning, this study proposes that the cultural experience reserve of a focal firm is a potential firm-specific advantage, leading to a reduced value of effective cultural distance for that firm. Using this proposed conceptualization of effective cultural distance, the current study empirically analyzes its impact on the probability of deal abandonment in cross-border merger and acquisition attempts by 212 Indian services sector firms. The authors also test the influence of firm-level characteristics that might moderate the relationship between effective cultural distance and the likelihood of cross-border deal abandonment.
About the journal
JournalAcademy of Management Proceedings
PublisherAcademy of Management
ISSN0065-0668
Open AccessNo