From outsiders to insiders: cultural friction in cross-border M&As by Chinese companies

Abstract

Purpose

Based on the business network view and cultural friction theory, this study aims to construct a theoretical model of the cultural friction effect and its mechanism of action during the transformation of Chinese enterprises from outsiders to insiders with equal and legitimate competitive status.

Design/methodology/approach

Data including cross-border M&As of Chinese enterprises in 17 major countries or regions and domestic M&As in China and host countries from 1982 to 2016 were used to test the hypotheses.

Findings

This study finds that the presence of cultural friction in cross-border M&As diminishes the probability that Chinese firms will adopt a more rapid pace of entry into the core position of the host country's business network.

Originality/value

First, this study has theoretical implications for studying Chinese firms' cross-border M&As from the perspective of the host country. Second, the theoretical construction of this paper reveals the double meaning from outsidership to insidership. Third, this study responds to the academic initiative that a more comprehensive and appropriate study should include factors such as the structural characteristics of the home or host market and stakeholders.

Citation

Li, D. and Fan, L. (2023), "From outsiders to insiders: cultural friction in cross-border M&As by Chinese companies", Nankai Business Review International, Vol. 14 No. 3, pp. 425-447. https://doi.org/10.1108/NBRI-11-2022-0102