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The aim of this paper is to discuss the trend towards cross‐border mergers and acquisitions (M&A) and review best practices for successful cross‐border M&A transactions (and how they differ from executing national deals).

The objectives are achieved through a review of four best practices for successful planning, implementation and execution of cross‐border deals. Also, a March 2006 Accenture/Economist Intelligence Unit survey is used which highlights trends towards cross‐border deals and common pitfalls in the successful execution of deals – in particular the difficulties in addressing cultural issues and local due diligence.

The paper finds that executives believe in their M&A strategy but doubt their organizational ability to successfully implement and execute and to realize financial gains and cross‐border deals offer a different mix of opportunities and risks, which need to be understood and managed if the deals are to be successful. The key to success lies in understanding exactly what makes cross‐border deal making different, and in developing the skills needed to create value.

There are four key drivers of success in cross‐border M&A: start with a clear and compelling strategy – the most successful cross‐border acquirers begin with a clear view of both the role that cross‐border acquisitions will play in their strategy and the type of companies best equipped to fill that role; do your homework – the greatest risks in cross‐border transactions arise from the failure to understand the culture, regulatory structure or competitive environment – and sometimes all three considerations – in the target market; value your new people – regardless of the rationale for the acquisition, a key asset – many would argue the most important one – in a cross‐border acquisition is people; and execution, execution, execution – successful execution begins early – in some cases, long before the deal is done.

A recent survey (Accenture/Economist Intelligence Unit, March 2006) shows for the first time that among global M&A deals, cross‐border transactions now exceed domestic transactions – and this trend is likely to continue. Yet for many c‐level executives, the prospect of acquiring or merging with a company in an unfamiliar market is daunting – and cross‐border M&A is considered more difficult than executing on domestic deals. This paper is intended to give c‐level executives practical, hands‐on advice for conducting cross‐border M&A as well as publicizing survey results specifically on the cross‐border M&A trend.

Extending the springboard perspective with the resource dependence theory, the authors posit that cross-border mergers and acquisitions (M&As) are a new channel for emerging economy firms (EEFs) to enhance their technology capabilities. This study aims to examine the impact of cross-border M&As initiated by EEFs on their technology augmentation vis-à-vis matched domestic M&A cases and investigate the factors influencing the difference in post-merger innovation capability.

This paper estimates the post-acquisition innovation capability of acquirers from emerging economies (EEs) that engage in cross-border M&As. To remove possible selection bias, the authors leverage a difference-in-difference-style approach in combination with a matched sample constructed by pairing each cross-border M&A case with a similar domestic deal. The data set contains 266 cross-border M&As and 266 matched domestic M&A deals between 2003 and 2011, whereby acquirers are based in 6 EEs and targets are in 36 countries consisting of both EEs and advanced economies (AEs).

The present empirical results show that cross-border M&As engaged by EEFs are an important engine for improving EEFs’ innovation capability through technology augmentation. The main empirical results are as follows. First, compared with matched domestic acquirers with similar characteristics, EE cross-border M&As have a positive effect on innovation capability. Second, the positive effect of the EEFs’ cross-border M&As relative to the matched domestic M&As on innovation capability is driven largely by cross-border M&As with targets in AEs. Third, the increase in post-M&A innovation capability of the EE cross-border acquirers comes mainly from deals where targets are based in countries with relatively superior human capital and innovation capability than those of the acquirers.

To the best of the authors’ knowledge, this study is the first systematic study of whether cross-border M&As serve as an effective channel of technology augmentation for EE acquirers compared to matched domestic acquirers with similar characteristics.

In this chapter, the authors draw insights from the literature on institutional distance and examine whether firms engaging in cross-border acquisitions overcome the liability of foreignness by using external advisors. Specifically, the authors argue that acquiring and target firms may alleviate heightened information asymmetries and transaction costs by leveraging the information-production and uncertainty-reduction roles of M&A advisors. Using a global sample of cross-border M&As from 2001 to 2020, the results suggest that institutional distance triggers both acquirers and targets to use M&A advisors. Among the four types of institutional distance the authors examined, cultural distance – and to a lesser extent administrative distance – greatly contributes to the use of various types of advisors in cross-border deals. Interestingly, although both parties in the transaction rely on advisors to overcome distance barriers, acquiring firms appear to hire advisors more often than target firms.

To reconcile the existing contradictory conclusions on the relationship between cross-border mergers and acquisitions (M&As) and innovation, this paper aims to propose a theoretical model of the impact of cross-border M&As on technological innovation and explore the moderating role of institutional distance from the perspective of springboard theory and new institutional theory.

Through the use of the two-way fixed effect model and the U-test method, the authors test the hypotheses based on a sample of cross-border M&A events of Chinese manufacturing enterprises during the period from 2006 to 2019.

The research shows that there is an inverted U-shaped relationship between cross-border M&As and technological innovation. Furthermore, formal institutional distance moderates the inverted U-shaped relationship in such a way that it reaches its turning point at a smaller scale of cross-border M&As, and the inverted U-shaped relationship is steeper when formal institutional distance is relatively high. The informal institutional distance moderates the inverted U-shaped relationship in such a way that it reaches its turning point at a larger scale of cross-border M&As and the inverted U-shaped relationship is flatter when the informal institutional distance is relatively high.

The research conclusions integrate heterogeneous views of the existing research, further clarify the influence mechanism and boundary conditions between cross-border M&As and technological innovation, identify the different moderating roles of formal institutional distance and informal institutional distance and enrich the literature on knowledge transfer and recombinant innovation during post-merger integration.

The purpose of this paper is to examine whether isomorphism and mimetic, coercive, and normative mechanisms apply to cross‐border mergers and acquisitions initiated by Chinese firms. Unlike prior studies, the paper aims to identify multiple bases for imitation of firm strategy and verify: whether the degree of conformity in the multiple bases of firm strategy increases over time; and how mimetic, coercive, and normative pressures affect the degree of conformity.

Hypotheses are tested on a sample of 1,004 cross‐border mergers and acquisitions (M&As) initiated by 671 Chinese firms from 1985 to 2006. The four decisions for imitation in cross‐border M&As are based on: the product relatedness between the acquiring and target firms; the location of the target firm; the ownership structure; and the size of the deal.

The results show that not all decisions on cross‐border M&As react to forces of conformity in the same way. Overtime, the overall degree of conformity in cross‐border M&As decreases. Factors that significantly affect the degree of conformity include the experiences of failure other firms in the industry, regulatory changes, and membership or entry into the World Trade Organization.

This paper re‐examines the concept of isomorphism and explores the conditions under which firms from emergent markets conform to others' decisions.

The purpose of this paper is to adopt a multi-level approach to investigate what factors shape the content of emerging market firms’ foreign market entry decisions, particularly the ownership participation in cross-border mergers and acquisitions (M&As). In addition, the author would like to know if companies from emerging markets that possess higher (or lower) ownership in cross-border M&As receive higher valuation in the market.

Using panel data of cross-border M&As by emerging market firms from 2000 to 2012, the author tests the hypothesized effects of the independent variables on the level of ownership participation; and uses a standard event study methodology to assess the market reaction of a particular cross-border M&A deal.

The author finds that a country-level factor (institutional distance), an industry-level factor (industry unrelatedness) and a firm-level factor (board concentration) have significant impact on ownership participation in cross-border M&As. The author also finds that investors do give high valuation to those emerging market firms that chose high ownership participation in cross-border M&As. However, the author did not finds the support for the relationship between ownership participation and cultural distance. Neither did the author finds the support for the relationship between ownership participation and board independence.

This study enhances the understanding of conditions under which the level of ownership participation in cross-border M&As would increase (decrease) and how the market reacts to high (low) ownership participation of cross-border M&As by emerging market firms.

The purpose of this paper is to draw attention to the significant lower completion rate of mergers and acquisitions (M&As) by firms from emerging economies (EEs) (China in particular) compared with firms from advanced economies, and identify the country- and industry-level factors that affect the completion of cross-border M&As by Chinese firms.

This study explores the effects of economic, cultural and institutional distances and target firms in technology- and knowledge-intensive industries on the completion of cross-border M&As by Chinese firms. It also examines the interplay between distance factors and technology- and knowledge-intensive industries on cross-border M&A completion. This study adopts a quantitative approach and is based on a sample of 768 announced cross-border M&A deals by firms in China between 2000 and 2015.

The results indicate that economic distance increases the likelihood of the completion of cross-border M&As when the target is in a more developed economy than China, but decreases when the target is in a less developed economy. Cultural and institutional distances have a significant, negative impact on the completion of cross-border M&As. In addition, target technology-intensive industries have a significant direct negative effect on cross-border M&A completion and moderate the relationship between the distance factors and the likelihood of cross-border M&A completion.

The results reveal factors that affect the completion of cross-border M&As by emerging market firms (EMFs). Further research, however, is needed to discover how distance factors affect how EMFs find, evaluate and negotiate international bids. To broaden the scope of the research, data for firms from other EEs would also be required.

The study expands the literature that considers the effects of major distances on cross-border M&A completion. In addition, the importance of defining and measuring distances in the context of cross-border M&As is highlighted. Finally, the study expands knowledge on how cross-border M&As affect the internationalization strategies of EMFs by conceptualizing and testing how target industries affect cross-border M&A completion.

This paper aims to explore the relationships between organizational unlearning and knowledge transfer in cross-border mergers and acquisitions (M&As) from a routine-based view. The study also stresses the mediating role that knowledge integration capability plays in this relationship.

In all, 178 samples were collected from Chinese multinational corporations that experienced cross-border M&As. In addition, the bootstrap method was used to test the mediating role of knowledge integration capability.

The empirical results indicate that knowledge integration capability is the crucial link between organizational unlearning and knowledge transfer. Specifically, this capability goes beyond the direct effect of organizational unlearning on knowledge transfer and points to the importance of enhancing knowledge integration capability. In turn, knowledge integration capability has a significant influence on knowledge transfer. The study finds that knowledge integration capability mediates the relationship between organizational unlearning and knowledge transfer.

This study adopts a routine-based view to develop a theoretical model for examining the relationship between organizational unlearning, knowledge integration capability and knowledge transfer in the context of cross-border M&As. This model provides new insights for a routine-based understanding of the important mediating role of knowledge integration capability for knowledge transfer and the effects of this role on the specific knowledge transfer, i.e. technological, marketing and managerial knowledge.

Cross-border M & A is one of the most important ways of international capital flows, and scholars have paid a lot of attention to this area, but a general explaining model has still not been generated. The purpose of this paper, based on Lambrecht (2004) and Bolton et al. (2013), is to build a general explaining model in this area and use the new model to explain some real world issues.

The model work in this paper is based on Lambrecht’s (2004) real option model, which is the classical modeling method in this area, and take the economic crisis method of Bolton et al. (2013) into consideration; the authors also use the relative market condition to illustrate the motivation and market timing of cross-border M & A in this paper to connected the bidders’ markets and targets’ markets together to build the general explaining model for cross-border M & A.

By analyzing the new model the authors build in this paper, the authors get three conclusions. Conclusion 1: when the bidders’ technologies are more advanced than the targets’, the bidders prefer market-seeking cross-border M & A, and the relatively higher the bidders’ technologies are, the stronger the preference is; when the bidders’ technologies are less advanced than the targets’, the bidders prefer technology-seeking cross-border M & A, and there exists an optimal relative technology ratio at which the bidders have the strongest motivation to exercise the technology-seeking type cross-border M & A. Conclusion 2: host country’s high economic growth helps attracting market-seeking cross-border M & A, conversely host country’s low economic growth helps attracting technology-seeking cross-border M & A. Conclusion 3: the bidders prefer to exercise the technology-seeking cross-border M & A when the home markets are stable or when economic crises happen in targets markets; and the bidders prefer not to exercise the market-seeking cross-border M & A when economic crises happen in home markets; and the relationship between the motivation for bidders to exercise market-seeking cross-border M & A and the possibility of the happening of economic crisis in home countries presents an inverse N-shape curve.

In this paper the authors first use the relative market condition to illustrate the motivation and market timing in the cross-border M & A research area and build a general model based on current literatures.

The purpose of this paper is to examine the influence of bilateral political relations on the completion stage premium of cross-border mergers and acquisitions(CSPCMA) and the moderating roles of cultural distance, trade openness and the nature of firm ownership for this relationship.

Based on a sample of 401 cross-border mergers and acquisitions (M&A) conducted by Chinese companies from 1995 to 2019 in the Statistical Data Center (SDC), this article used weighted least squares (WLS) to empirically test the impact of bilateral political relations between countries on the CSPCMA.

The better the target country of entry’s bilateral political relations with China, the lower the premium of the transaction price paid by Chinese companies at the completion stage of cross-border M&A. Among the moderators, the study found cultural distance positively moderates the relationship between bilateral political relations between countries and CSPCMA. The degree of trade openness of the target country negatively moderates the relationship between bilateral political relations between countries and CSPCMA. The negative relationship between bilateral political relations between countries and CSPCMA is stronger when the acquirer is a state-owned enterprise (SOE).

The findings of this study not only add to the knowledge about the relationship between bilateral political relations and corporate cross-border M&A premiums, but also have managerial implications for Chinese corporate managers to sustainably reduce corporate cross-border M&A premiums.