Experiential learning for Chinese companies to complete cross-border acquisitions: the case of Chinese acquirers

Abstract

Purpose

In a contribution to the emerging research examining Chinese cross-border acquisitions (CBAs), the authors observe experiential learning applications for enhancing M&A completions. By emphasizing knowledge transfer, the authors reveal how target-to-target industry similarity and bidder-to-target cultural distance affect learning outcomes.

Design/methodology/approach

Using a binary logistic regression model, the authors examine a sample of CBA attempts announced by Chinese companies from January 2002 to December 2012 to identify the variables that affect the completion of CBAs.

Findings

The authors find that foreign acquisition experience but not domestic acquisition experience enhances subsequent acquisition attempts, especially when prior and focal target companies share the dominant industrial logic. Learning transfer is negatively affected when target countries are more culturally distant from China, but learning benefits appear to increase under strong bidder-to-target cultural distance.

Originality/value

By investigating learning in the precompletion stage in Chinese outward CBAs, the authors complement research that uses postacquisition performance to assess learning. The authors’ more fine-grained characterization reveals that acquisition experience increases knowledge transfer through experiential learning. Furthermore, the authors show that dominant industrial logic and cultural distance are underexplored contextual conditions, although they interact with foreign and domestic experience to affect the completion of CBAs.

Citation

Wang, L., Schweizer, L. and Michaelis, B. (2021), "Experiential learning for Chinese companies to complete cross-border acquisitions: the case of Chinese acquirers", International Journal of Emerging Markets, Vol. 16 No. 4, pp. 674-695. https://doi.org/10.1108/IJOEM-12-2018-0663