부산대학교 도서관

We examine whether the cultural orientation of target firms influences the outcomes of international mergers and acquisitions (M&As). Prior research shows that the national culture of the acquiring firm country influences M&As, as well as the distance between the acquiring and target country cultures. Not previously studied from a cultural perspective of M&As has been the target country culture, despite estimates that about 40% of M&As are target-initiated. Our focus is on target firm cultural orientation, including how cultural orientation affects the likelihood of, and returns from, M&As. Our testing applies three cultural orientation factors (results, tradition and people orientation) extracted from a GLOBE cultural framework to a dataset of firm-level M&A data across 39 countries, in 1990-2016. We find that firms from cultures with a results orientation are less likely to become M&A targets and also experience higher cumulative abnormal returns if acquired, while firms from countries with cultures with a tradition orientation or a people orientation are more likely to become targets but experience lower cumulative abnormal returns if acquired. These results are robust to a comprehensive range of robustness tests. Our findings suggest that understanding the cultural orientation of target firms is important to understanding M&A outcomes. Biographical information: Muhammad Farooq Ahmad is Assistant Professor of Finance at Skema Business School - Université Côte d'Azur, France. He holds a PhD in Finance jointly from the Université Lille 2 and Skema Business School. His research interests are in empirical corporate finance, corporate governance, mergers and acquisitions, national culture, labour market institutions and CEO behaviour. He has published in Review of Financial Studies, Journal of Banking & Finance and his work has been presented at various high-quality international conferences. Saqib Aziz is Associate Professor of Finance at Rennes School of Business. He holds a PhD in Finance from the University of Rennes 1. His research interests are in mergers and acquisitions, financial stability, regulations of banks and financial institutions, corporate finance, sustainable finance, national culture and artificial intelligence in finance. He has published in various peer-reviewed international journals and his work has been presented at various high-quality international conferences. Michael Dowling is Associate Professor of Finance at Rennes School of Business. He holds a PhD in Finance from Trinity College Dublin. His research interests are in behavioural finance, mergers and acquisitions, corporate finance, national culture and artificial intelligence in finance. He has published in various peer-reviewed international journals including Research Policy, Journal of World Business, Energy Economics, International Review of Financial Analysis and his work has been presented at various high-quality international conferences. Article Note: We thank Douglas Cumming, Co-editor-in-Chief of the British Journal of Management, and three anonymous referees as the paper benefitted enormously from their valuable feedback. We also thank Eric de Bodt, Helen Bollaert, Charlie Cai, Ricardo Calgano, Cécile Carpentier, Francois Derrien, Jarrad Harford, David Hillier, Frédéric Lobez and participants of BAFA 2019 (UK), FEBS 2018 (Italy), 3rd Small Business Economics, Accounting and Finance Workshop 2018 (France), IAFDS 2015 (Ljubljana) and AFFI PhD Workshop 2014 (Belgium) for their useful comments. CAPTION(S): Table A.1: Variable definitions Table A.2: Correlation matrix of GLOBE culture dimensions Table A.3: GLOBE dimensions factor analysis Table A.4: Correlation matrix Table A.5: Marginal effects: probability of firms becoming targets Byline: Muhammad Farooq Ahmad, Saqib Aziz, Michael M. Dowling