Many announced cross-border mergers and acquisitions (M&As) are never brought to completion d... more Many announced cross-border mergers and acquisitions (M&As) are never brought to completion despite potential negative consequences to acquirers and targets. This paper presented evidence on the dynamic effects of spatial distance and two industry-level characteristics, namely industry relatedness between the two firms and technological intensity, on the completion likelihood of cross-border M&A deals. Based on a sample of 8,489 M&A transactions we found that the completion likelihood of cross-border M&As increases with spatial distance. The effect is more pronounced for deals across technology-based industries, evidence for related deals is inconclusive.
This case highlights the major steps of conducting our research, in which we examined whether fir... more This case highlights the major steps of conducting our research, in which we examined whether firms could learn from prior divestitures, that is, selling activities, to complete subsequent acquisitions. We drew arguments from the organizational learning theory to develop our research model and used secondary data to test the proposed hypotheses. As the research topic was quite new and not many studies had explored it, we developed our theoretical model and collected the data at the same time. We wanted to make sure that we would have appropriate data and enough observations for the empirical analysis. In addition, exploring the data from the start would give us some more insights on practical issues of mergers and acquisitions, which are not discussed much in academic papers. The data collection and organization were time-consuming because mergers and acquisitions are complicated activities and each transaction can contain a lot of information. Therefore, to avoid mistakes, we made a data diary, which saved every single step that we took to handle the data, including the reasons why we did so and other remarks. Regarding the empirical analysis, we chose a logit regression model as our dependent variable was binary. This implied that interpretation of the results was not straightforward because coefficients in non-linear models cannot be interpreted in the same way as they are in linear models. We discussed this issue in the “Result Interpretation” section before concluding the case with some practical lessons that we gained from our project.
We develop theory and hypotheses on how a firm learns from both acquisitions and divestitures to ... more We develop theory and hypotheses on how a firm learns from both acquisitions and divestitures to complete a new acquisition deal. In addition, we examine how knowledge transfer due to prior experience is influenced by the timing of an acquisition attempt in a merger wave. As far as learning from prior acquisition deal-making is concerned, we apply standard arguments from organizational learning theory. Moreover, drawing arguments from vicarious observational learning theory, we suggest that firms can learn about how to strike an acquisition deal through observing the deal-making process from the other side of the transaction – i.e., through a divestiture. Finally, we argue that learning from prior experience can be moderated by the timing of the acquisition attempt in the wave, as firms and managers feel the pressure of information cascades in later stages of the wave. We test our hypotheses in the context of the pre-integration process with a sample of 3,984 M&A transactions in six industry waves. Empiri...
We examine whether experience from prior divestitures is associated with higher completion likeli... more We examine whether experience from prior divestitures is associated with higher completion likelihood in subsequent acquisitions. We argue that through divestitures, firms could extract meaningful knowledge that is helpful for completing their acquisitions, such as a general understanding of acquisition deal-making stages, and the stories and aims of the target in an M&A transaction. In addition, viewing divestitures as the flipside of acquisitions, we conjecture that the selling firm can observe how the divested component of their business is acquired, and vicariously learn from these observations. We also investigate the relative importance of learning from divestiture visa -vis acquisition experience in determining acquisition deal completion. Finally, we contend that the effect of learning from divestitures on acquisition deal completion depends on acquisition experience and deal value. We find evidence supporting our conjectures in a sample of 2164 M&A transactions from the worldwide computer and printing industries between 1991 and 2010.
Many announced cross-border mergers and acquisitions (M&As) are never brought to completion d... more Many announced cross-border mergers and acquisitions (M&As) are never brought to completion despite potential negative consequences to acquirers and targets. This paper presented evidence on the dynamic effects of spatial distance and two industry-level characteristics, namely industry relatedness between the two firms and technological intensity, on the completion likelihood of cross-border M&A deals. Based on a sample of 8,489 M&A transactions we found that the completion likelihood of cross-border M&As increases with spatial distance. The effect is more pronounced for deals across technology-based industries, evidence for related deals is inconclusive.
This case highlights the major steps of conducting our research, in which we examined whether fir... more This case highlights the major steps of conducting our research, in which we examined whether firms could learn from prior divestitures, that is, selling activities, to complete subsequent acquisitions. We drew arguments from the organizational learning theory to develop our research model and used secondary data to test the proposed hypotheses. As the research topic was quite new and not many studies had explored it, we developed our theoretical model and collected the data at the same time. We wanted to make sure that we would have appropriate data and enough observations for the empirical analysis. In addition, exploring the data from the start would give us some more insights on practical issues of mergers and acquisitions, which are not discussed much in academic papers. The data collection and organization were time-consuming because mergers and acquisitions are complicated activities and each transaction can contain a lot of information. Therefore, to avoid mistakes, we made a data diary, which saved every single step that we took to handle the data, including the reasons why we did so and other remarks. Regarding the empirical analysis, we chose a logit regression model as our dependent variable was binary. This implied that interpretation of the results was not straightforward because coefficients in non-linear models cannot be interpreted in the same way as they are in linear models. We discussed this issue in the “Result Interpretation” section before concluding the case with some practical lessons that we gained from our project.
We develop theory and hypotheses on how a firm learns from both acquisitions and divestitures to ... more We develop theory and hypotheses on how a firm learns from both acquisitions and divestitures to complete a new acquisition deal. In addition, we examine how knowledge transfer due to prior experience is influenced by the timing of an acquisition attempt in a merger wave. As far as learning from prior acquisition deal-making is concerned, we apply standard arguments from organizational learning theory. Moreover, drawing arguments from vicarious observational learning theory, we suggest that firms can learn about how to strike an acquisition deal through observing the deal-making process from the other side of the transaction – i.e., through a divestiture. Finally, we argue that learning from prior experience can be moderated by the timing of the acquisition attempt in the wave, as firms and managers feel the pressure of information cascades in later stages of the wave. We test our hypotheses in the context of the pre-integration process with a sample of 3,984 M&A transactions in six industry waves. Empiri...
We examine whether experience from prior divestitures is associated with higher completion likeli... more We examine whether experience from prior divestitures is associated with higher completion likelihood in subsequent acquisitions. We argue that through divestitures, firms could extract meaningful knowledge that is helpful for completing their acquisitions, such as a general understanding of acquisition deal-making stages, and the stories and aims of the target in an M&A transaction. In addition, viewing divestitures as the flipside of acquisitions, we conjecture that the selling firm can observe how the divested component of their business is acquired, and vicariously learn from these observations. We also investigate the relative importance of learning from divestiture visa -vis acquisition experience in determining acquisition deal completion. Finally, we contend that the effect of learning from divestitures on acquisition deal completion depends on acquisition experience and deal value. We find evidence supporting our conjectures in a sample of 2164 M&A transactions from the worldwide computer and printing industries between 1991 and 2010.
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Papers by Trang Đoan