Cultural distance and post-acquisition performance: the role of absorptive capacity
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Accepted Version
Date
2022-04-30
Authors
Tonn Goulart Moura, Stephanie
Falaster, Christian
Silva-Rêgo, Bernardo
Journal Title
Journal ISSN
Volume Title
Publisher
Emerald Publishing Ltd.
Published Version
Abstract
Purpose: Cultural distance can be a challenge for internationalization. However, in some instances, it is possible that different cultures could represent a benefit for multinational enterprises (MNEs) from emerging contexts. Drawing on the knowledge-based view (KBV), the authors propose that greater cultural distances lead to benefits for multinationals seeking to absorb new knowledge overseas. Design/methodology/approach: The authors performed ordinary least squares regressions with moderation tests over a database containing 101 cross-border acquisitions to test the study’s hypotheses. The acquisitions were performed by Brazilian firms between 1995 and 2015, targeting 24 host countries. Findings: The study’s results indicate that cultural distance positively affects the firm's post-acquisition performance and that absorptive capacity moderates these results, improving the positive effect. The study suggests that cultural diversity is an asset for the multinationals in question. Practical implications: When deciding to invest in a foreign country, managers should consider this cultural diversity as one more value creation driver, especially if the firm has well-developed innovation capabilities. Originality/value: The study’s findings contribute to the international business literature providing further evidence that emerging markets multinationals can create value in acquisitions through the firm's abilities to exploit cultural asymmetries. Thus, the authors also emphasize that absorptive capacity plays a strategic role in multinational's international strategies.
Description
Keywords
Cultural distance , International acquisitions , Post-acquisition performance , Knowledge-based view , Absorptive capacity
Citation
Moura, S. T. G., Falaster, C. and Silva-Rêgo, B. (2023) 'Cultural distance and post-acquisition performance: the role of absorptive capacity', International Journal of Emerging Markets, 18(12), pp.6322-6342. https://doi.org/10.1108/IJOEM-08-2021-1251